Markets

PEBO vs. CBSH: Which Stock Is the Better Value Option?

Investors looking for stocks in the Banks - Midwest sector might want to consider either Peoples Bancorp (PEBO) or Commerce Bancshares (CBSH). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Peoples Bancorp has a Zacks Rank of #2 (Buy), while Commerce Bancshares has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that PEBO likely has seen a stronger improvement to its earnings outlook than CBSH has recently. But this is only part of the picture for value investors.

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.

PEBO currently has a forward P/E ratio of 12.59, while CBSH has a forward P/E of 14.78. We also note that PEBO has a PEG ratio of 1.57. 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. CBSH currently has a PEG ratio of 1.73.

Another notable valuation metric for PEBO is its P/B ratio of 1.16. 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, CBSH has a P/B of 2.34.

These are just a few of the metrics contributing to PEBO's Value grade of B and CBSH's Value grade of C.

PEBO stands above CBSH thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PEBO is the superior value option right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Peoples Bancorp Inc. (PEBO): Free Stock Analysis Report

Commerce Bancshares, Inc. (CBSH): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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.

In This Story

PEBO CBSH

Other Topics

Investing Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More