Investors looking for stocks in the Banks - Northeast sector might want to consider either Fulton Financial (FULT) or 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.
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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, both Fulton Financial and Webster Financial are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
FULT currently has a forward P/E ratio of 13.53, while WBS has a forward P/E of 15.77. We also note that FULT has a PEG ratio of 1.69. 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. WBS currently has a PEG ratio of 1.97.
Another notable valuation metric for FULT is its P/B ratio of 1.21. 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 2.01.
These metrics, and several others, help FULT earn a Value grade of B, while WBS has been given a Value grade of C.
Both FULT and WBS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that FULT is the superior value option right now.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.