Investors interested in Banks - Southeast stocks are likely familiar with First Horizon National (FHN) and Triumph Bancorp (TBK). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
First Horizon National and Triumph Bancorp are sporting Zacks Ranks of #2 (Buy) and #5 (Strong 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 FHN is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
FHN currently has a forward P/E ratio of 10.11, while TBK has a forward P/E of 18.01. We also note that FHN has a PEG ratio of 1.24. 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. TBK currently has a PEG ratio of 1.50.
Another notable valuation metric for FHN is its P/B ratio of 1.04. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TBK has a P/B of 1.66.
These metrics, and several others, help FHN earn a Value grade of B, while TBK has been given a Value grade of D.
FHN stands above TBK thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FHN is the superior value option right now.