Investors with an interest in Banks - Southeast stocks have likely encountered both Summit Financial (SMMF - Free Report) and First Bancorp (FBNC - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
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.
Summit Financial and First Bancorp are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SMMF has an improving earnings outlook. But this is just one factor that value investors are interested in.
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 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.
SMMF currently has a forward P/E ratio of 11.71, while FBNC has a forward P/E of 12.39. We also note that SMMF has a PEG ratio of 1.46. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FBNC currently has a PEG ratio of 2.81.
Another notable valuation metric for SMMF is its P/B ratio of 1.42. 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, FBNC has a P/B of 1.46.
These are just a few of the metrics contributing to SMMF's Value grade of B and FBNC's Value grade of C.
SMMF has seen stronger estimate revision activity and sports more attractive valuation metrics than FBNC, so it seems like value investors will conclude that SMMF is the superior option right now.