Investors with an interest in Banks - Southeast stocks have likely encountered both Franklin Financial Network (FSB) and National Bank Holdings (NBHC). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Franklin Financial Network and National Bank Holdings are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
FSB currently has a forward P/E ratio of 12.78, while NBHC has a forward P/E of 16.01. We also note that FSB has a PEG ratio of 1.28. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NBHC currently has a PEG ratio of 1.60.
Another notable valuation metric for FSB is its P/B ratio of 1.48. 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, NBHC has a P/B of 1.59.
These are just a few of the metrics contributing to FSB's Value grade of B and NBHC's Value grade of D.
Both FSB and NBHC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that FSB is the superior value option right now.
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Franklin Financial Network, Inc. (FSB): Free Stock Analysis Report
National Bank Holdings Corporation (NBHC): 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.
