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SASR vs. NCBS: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Banks - Northeast sector might want to consider either Sandy Spring Bancorp (SASR - Free Report) or Nicolet Bankshares . 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.

Currently, Sandy Spring Bancorp has a Zacks Rank of #2 (Buy), while Nicolet Bankshares has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SASR is likely seeing its earnings outlook improve to a greater extent. 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.

SASR currently has a forward P/E ratio of 10.40, while NCBS has a forward P/E of 12.70. We also note that SASR has a PEG ratio of 1.43. 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. NCBS currently has a PEG ratio of 1.81.

Another notable valuation metric for SASR is its P/B ratio of 1.07. 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, NCBS has a P/B of 1.51.

These are just a few of the metrics contributing to SASR's Value grade of A and NCBS's Value grade of D.

SASR is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that SASR is likely the superior value option right now.


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