Investors with an interest in Banks - Southeast stocks have likely encountered both First Bancorp (FBP) and City Holding (CHCO). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
First Bancorp has a Zacks Rank of #2 (Buy), while City Holding has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FBP 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
FBP currently has a forward P/E ratio of 13.97, while CHCO has a forward P/E of 14.83. We also note that FBP has a PEG ratio of 1.03. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CHCO currently has a PEG ratio of 1.85.
Another notable valuation metric for FBP is its P/B ratio of 1.13. 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, CHCO has a P/B of 2.08.
These are just a few of the metrics contributing to FBP's Value grade of B and CHCO's Value grade of C.
FBP sticks out from CHCO in both our Zacks Rank and Style Scores models, so value investors will likely feel that FBP is the better option right now.
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First BanCorp. (FBP) : Free Stock Analysis Report
City Holding Company (CHCO) : Free Stock Analysis Report
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