Back to top

Image: Bigstock

STBZ or TBK: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in stocks from the Banks - Southeast sector have probably already heard of State Bank Financial and 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

State Bank Financial and Triumph Bancorp are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that STBZ is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

STBZ currently has a forward P/E ratio of 11.73, while TBK has a forward P/E of 16.42. We also note that STBZ has a PEG ratio of 0.87. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. TBK currently has a PEG ratio of 1.64.

Another notable valuation metric for STBZ is its P/B ratio of 1.53. 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 1.59.

These are just a few of the metrics contributing to STBZ's Value grade of B and TBK's Value grade of C.

STBZ has seen stronger estimate revision activity and sports more attractive valuation metrics than TBK, so it seems like value investors will conclude that STBZ is the superior option right now.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Triumph Bancorp, Inc. (TBK) - free report >>

Published in