TCF or CBSH: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Banks - Midwest sector might want to consider either TCF Financial (TCF) or Commerce Bancshares (CBSH). But which of these two companies is the best option for those looking for undervalued stocks? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
TCF Financial and Commerce Bancshares are both sporting a Zacks Rank of # 2 (Buy) right now. 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 factor that value investors are interested in.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
TCF currently has a forward P/E ratio of 10.76, while CBSH has a forward P/E of 15.19. We also note that TCF has a PEG ratio of 1.04. 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. CBSH currently has a PEG ratio of 3.49.
Another notable valuation metric for TCF is its P/B ratio of 1.45. 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, CBSH has a P/B of 2.32.
These metrics, and several others, help TCF earn a Value grade of B, while CBSH has been given a Value grade of D.
Both TCF and CBSH are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TCF is the superior value option right now.
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TCF Financial Corporation (TCF): Free Stock Analysis Report
Commerce Bancshares, Inc. (CBSH): 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.