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PUB vs. FRC: Which Stock Is the Better Value Option?

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Investors interested in Banks - West stocks are likely familiar with Peoples Utah Bancorp and First Republic Bank . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Peoples Utah Bancorp is sporting a Zacks Rank of #2 (Buy), while First Republic Bank has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that PUB likely has seen a stronger improvement to its earnings outlook than FRC has recently. 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.

PUB currently has a forward P/E ratio of 12.91, while FRC has a forward P/E of 18.48. We also note that PUB has a PEG ratio of 1.61. 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. FRC currently has a PEG ratio of 1.64.

Another notable valuation metric for PUB is its P/B ratio of 1.83. 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, FRC has a P/B of 2.02.

These metrics, and several others, help PUB earn a Value grade of B, while FRC has been given a Value grade of C.

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

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