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WAL vs. BMRC: Which Stock Is the Better Value Option?

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Investors interested in Banks - West stocks are likely familiar with Western Alliance (WAL - Free Report) and Bank of Marin (BMRC - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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.

Right now, Western Alliance is sporting a Zacks Rank of #2 (Buy), while Bank of Marin has a Zacks Rank of #3 (Hold). This means that WAL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

WAL currently has a forward P/E ratio of 9.40, while BMRC has a forward P/E of 17.18. We also note that WAL has a PEG ratio of 0.83. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BMRC currently has a PEG ratio of 2.45.

Another notable valuation metric for WAL is its P/B ratio of 1.62. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BMRC has a P/B of 1.75.

These metrics, and several others, help WAL earn a Value grade of B, while BMRC has been given a Value grade of D.

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




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Western Alliance Bancorporation (WAL) - free report >>

Bank of Marin Bancorp (BMRC) - free report >>

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