Investors interested in Banks - Southwest stocks are likely familiar with First Horizon National (FHN) and Cullen/Frost Bankers (CFR). 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.
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.
First Horizon National and Cullen/Frost Bankers are both sporting a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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 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.
FHN currently has a forward P/E ratio of 12.39, while CFR has a forward P/E of 13.71. We also note that FHN has a PEG ratio of 0.88. 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. CFR currently has a PEG ratio of 3.14.
Another notable valuation metric for FHN is its P/B ratio of 1.41. 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, CFR has a P/B of 2.
Based on these metrics and many more, FHN holds a Value grade of B, while CFR has a Value grade of C.
Both FHN and CFR are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that FHN is the superior value option right now.
#1 Semiconductor Stock to Buy (Not NVDA)
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See This Stock Now for Free >>First Horizon Corporation (FHN) : Free Stock Analysis Report
Cullen/Frost Bankers, Inc. (CFR) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
