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ASB vs. CBSH: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Banks - Midwest stocks have likely encountered both Associated Banc-Corp (ASB) and 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Associated Banc-Corp is sporting a Zacks Rank of #2 (Buy), while Commerce Bancshares has a Zacks Rank of #3 (Hold). This means that ASB's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

ASB currently has a forward P/E ratio of 11.61, while CBSH has a forward P/E of 18.43. We also note that ASB has a PEG ratio of 1.45. 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 1.59.

Another notable valuation metric for ASB is its P/B ratio of 0.81. 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 2.61.

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

ASB sticks out from CBSH in both our Zacks Rank and Style Scores models, so value investors will likely feel that ASB is the better option right now.


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Associated BancCorp (ASB) : Free Stock Analysis Report
 
Commerce Bancshares, Inc. (CBSH) : Free Stock Analysis Report
 
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Zacks Investment Research