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CUBI or TBK: Which Is the Better Value Stock Right Now?

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Investors with an interest in Banks - Southeast stocks have likely encountered both Customers Bancorp (CUBI - Free Report) and Triumph Bancorp . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Customers Bancorp and Triumph Bancorp are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CUBI is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

CUBI currently has a forward P/E ratio of 10.49, while TBK has a forward P/E of 14.50. We also note that CUBI has a PEG ratio of 1.05. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TBK currently has a PEG ratio of 1.45.

Another notable valuation metric for CUBI is its P/B ratio of 0.82. 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, TBK has a P/B of 1.31.

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

CUBI has seen stronger estimate revision activity and sports more attractive valuation metrics than TBK, so it seems like value investors will conclude that CUBI is the superior option right now.


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