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UMPQ vs. BOH: Which Stock Is the Better Value Option?

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Investors interested in Banks - West stocks are likely familiar with Umpqua Holdings and Bank of Hawaii (BOH - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Umpqua Holdings has a Zacks Rank of #2 (Buy), while Bank of Hawaii has a Zacks Rank of #3 (Hold) right now. This means that UMPQ's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 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.

UMPQ currently has a forward P/E ratio of 10.04, while BOH has a forward P/E of 12.49. We also note that UMPQ has a PEG ratio of 1.12. 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. BOH currently has a PEG ratio of 1.67.

Another notable valuation metric for UMPQ is its P/B ratio of 0.93. 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, BOH has a P/B of 2.34.

These metrics, and several others, help UMPQ earn a Value grade of A, while BOH has been given a Value grade of C.

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


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