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QCRH vs. FFBC: Which Stock Is the Better Value Option?

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Investors interested in Banks - Midwest stocks are likely familiar with QCR Holdings (QCRH - Free Report) and First Financial Bancorp (FFBC - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, QCR Holdings is sporting a Zacks Rank of #2 (Buy), while First Financial Bancorp has a Zacks Rank of #4 (Sell). This means that QCRH's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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 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.

QCRH currently has a forward P/E ratio of 9.28, while FFBC has a forward P/E of 11.31. We also note that QCRH has a PEG ratio of 0.93. 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. FFBC currently has a PEG ratio of 1.13.

Another notable valuation metric for QCRH is its P/B ratio of 1.16. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, FFBC has a P/B of 1.24.

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

QCRH stands above FFBC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that QCRH is the superior value option right now.


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