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FCCY vs. FCF: Which Stock Is the Better Value Option?

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Investors interested in Banks - Northeast stocks are likely familiar with 1st Constitution Bancorp (FCCY) and First Commonwealth Financial (FCF - Free Report) . 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, 1st Constitution Bancorp is sporting a Zacks Rank of #1 (Strong Buy), while First Commonwealth Financial has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that FCCY likely has seen a stronger improvement to its earnings outlook than FCF 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.

FCCY currently has a forward P/E ratio of 11.62, while FCF has a forward P/E of 12.36. We also note that FCCY has a PEG ratio of 1.45. 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. FCF currently has a PEG ratio of 1.54.

Another notable valuation metric for FCCY is its P/B ratio of 1.21. 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, FCF has a P/B of 1.33.

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

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


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