HWC or UBSI: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Banks - Southeast sector might want to consider either Hancock Whitney (HWC) or United Bankshares (UBSI). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
Hancock Whitney has a Zacks Rank of #2 (Buy), while United Bankshares has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that HWC likely has seen a stronger improvement to its earnings outlook than UBSI has recently. But this is just one factor that value investors are interested in.
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.
HWC currently has a forward P/E ratio of 9.81, while UBSI has a forward P/E of 14.51. We also note that HWC has a PEG ratio of 1.23. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. UBSI currently has a PEG ratio of 1.81.
Another notable valuation metric for HWC is its P/B ratio of 1.09. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, UBSI has a P/B of 1.14.
Based on these metrics and many more, HWC holds a Value grade of B, while UBSI has a Value grade of C.
HWC has seen stronger estimate revision activity and sports more attractive valuation metrics than UBSI, so it seems like value investors will conclude that HWC is the superior option right now.
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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.