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BANR or HFWA: Which Is the Better Value Stock Right Now?

Investors interested in Financial - Savings and Loan stocks are likely familiar with Banner (BANR) and Heritage Financial (HFWA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Banner and Heritage Financial are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that BANR likely has seen a stronger improvement to its earnings outlook than HFWA has recently. But this is just one factor that value investors are interested in.

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.

BANR currently has a forward P/E ratio of 15.42, while HFWA has a forward P/E of 18.14. We also note that BANR has a PEG ratio of 1.54. 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. HFWA currently has a PEG ratio of 1.81.

Another notable valuation metric for BANR is its P/B ratio of 1.47. 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, HFWA has a P/B of 1.60.

These metrics, and several others, help BANR earn a Value grade of B, while HFWA has been given a Value grade of C.

BANR 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 BANR is likely the superior value option right now.

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Banner Corporation (BANR): Free Stock Analysis Report

Heritage Financial Corporation (HFWA): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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