Back to top

Image: Bigstock

BANR or NWBI: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in stocks from the Financial - Savings and Loan sector have probably already heard of Banner (BANR - Free Report) and Northwest Bancshares (NWBI - 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.

Banner has a Zacks Rank of #2 (Buy), while Northwest Bancshares has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BANR has an improving earnings 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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

BANR currently has a forward P/E ratio of 12.66, while NWBI has a forward P/E of 16.87. We also note that BANR has a PEG ratio of 1.81. 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. NWBI currently has a PEG ratio of 2.41.

Another notable valuation metric for BANR is its P/B ratio of 1.20. 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, NWBI has a P/B of 1.47.

These are just a few of the metrics contributing to BANR's Value grade of B and NWBI's Value grade of D.

BANR sticks out from NWBI in both our Zacks Rank and Style Scores models, so value investors will likely feel that BANR is the better option right now.


See More Zacks Research for These Tickers


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


Banner Corporation (BANR) - free report >>

Northwest Bancshares, Inc. (NWBI) - free report >>

Published in