Investors looking for stocks in the Banks - Southeast sector might want to consider either Iberiabank (IBKC - Free Report) or Triumph Bancorp (TBK - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Iberiabank has a Zacks Rank of #2 (Buy), while Triumph Bancorp has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that IBKC is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
IBKC currently has a forward P/E ratio of 11.87, while TBK has a forward P/E of 16.55. We also note that IBKC has a PEG ratio of 1.48. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TBK currently has a PEG ratio of 1.50.
Another notable valuation metric for IBKC is its P/B ratio of 1.17. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, TBK has a P/B of 1.62.
These metrics, and several others, help IBKC earn a Value grade of B, while TBK has been given a Value grade of C.
IBKC sticks out from TBK in both our Zacks Rank and Style Scores models, so value investors will likely feel that IBKC is the better option right now.