ASB vs. FMBI: Which Stock Should Value Investors Buy Now?
Investors with an interest in Banks - Midwest stocks have likely encountered both Associated Banc-Corp (ASB) and First Midwest Bancorp (FMBI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Associated Banc-Corp and First Midwest Bancorp are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ASB is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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 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 13.38, while FMBI has a forward P/E of 16.20. We also note that ASB has a PEG ratio of 1.91. 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. FMBI currently has a PEG ratio of 2.31.
Another notable valuation metric for ASB is its P/B ratio of 1.30. 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, FMBI has a P/B of 1.48.
These metrics, and several others, help ASB earn a Value grade of B, while FMBI has been given a Value grade of C.
ASB sticks out from FMBI 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 Banc-Corp (ASB) : Free Stock Analysis Report
First Midwest Bancorp, Inc. (FMBI) : Free Stock Analysis Report
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