BWB Or WBS: Which Is The Better Value Stock Right Now?

Investors interested in stocks from the Banks - Northeast sector have probably already heard of Bridgewater Bancshares, Inc. (BWB) and Webster Financial (WBS). 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.

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.

Bridgewater Bancshares, Inc. has a Zacks Rank of #1 (Strong Buy), while Webster Financial has a Zacks Rank of #4 (Sell) right now. This means that BWB's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

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.

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.

BWB currently has a forward P/E ratio of 11.38, while WBS has a forward P/E of 12.48. We also note that BWB has a PEG ratio of 0.76. 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. WBS currently has a PEG ratio of 1.56.

Another notable valuation metric for BWB is its P/B ratio of 1.55. 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, WBS has a P/B of 1.62.

Based on these metrics and many more, BWB holds a Value grade of B, while WBS has a Value grade of C.

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