Investors interested in Banks - Southeast stocks are likely familiar with Hancock Whitney (HWC) and First Bancorp (FBNC). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Hancock Whitney has a Zacks Rank of #2 (Buy), while First Bancorp 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 HWC is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
HWC currently has a forward P/E ratio of 10.51, while FBNC has a forward P/E of 12.68. We also note that HWC has a PEG ratio of 1.31. 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. FBNC currently has a PEG ratio of 3.84.
Another notable valuation metric for HWC 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, FBNC has a P/B of 1.38.
These metrics, and several others, help HWC earn a Value grade of A, while FBNC has been given a Value grade of C.
HWC has seen stronger estimate revision activity and sports more attractive valuation metrics than FBNC, so it seems like value investors will conclude that HWC is the superior option right now.
Hancock Whitney Corporation (HWC): Free Stock Analysis Report
First Bancorp (FBNC): Free Stock Analysis Report
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