U.S. Markets open in 8 hrs 35 mins
  • S&P Futures

    4,158.00
    -2.00 (-0.05%)
     
  • Dow Futures

    34,124.00
    +6.00 (+0.02%)
     
  • Nasdaq Futures

    13,479.50
    -11.50 (-0.09%)
     
  • Russell 2000 Futures

    2,237.90
    +1.30 (+0.06%)
     
  • Crude Oil

    65.71
    +0.08 (+0.12%)
     
  • Gold

    1,788.30
    +4.00 (+0.22%)
     
  • Silver

    26.58
    +0.06 (+0.24%)
     
  • EUR/USD

    1.2011
    +0.0001 (+0.0120%)
     
  • 10-Yr Bond

    1.5840
    0.0000 (0.00%)
     
  • Vix

    19.15
    -0.33 (-1.69%)
     
  • GBP/USD

    1.3896
    -0.0012 (-0.0834%)
     
  • USD/JPY

    109.3760
    +0.1870 (+0.1713%)
     
  • BTC-USD

    56,987.77
    +2,363.96 (+4.33%)
     
  • CMC Crypto 200

    1,459.46
    +54.15 (+3.85%)
     
  • FTSE 100

    7,039.30
    +116.13 (+1.68%)
     
  • Nikkei 225

    29,314.60
    +501.97 (+1.74%)
     

Is BCB Bancorp (BCBP) a Worthy Stock for Value Investors?

  • Oops!
    Something went wrong.
    Please try again later.
Zacks Equity Research
·5 min read
  • Oops!
    Something went wrong.
    Please try again later.

Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?

One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put BCB Bancorp, Inc. BCBP stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:

PE Ratio

A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.

On this front, BCB Bancorp has a trailing twelve months PE ratio of 12.5, as you can see in the chart below:

This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 28.84. If we focus on the long-term PE trend, BCB Bancorp’s current PE level puts it below its midpoint over the past five years.

Further, the stock’s PE compares favorably with the Zacks Finance sector’s trailing twelve months PE ratio, which stands at 20.38. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.

We should also point out that BCB Bancorp has a forward PE ratio (price relative to this year’s earnings) of just 10.96, so it is fair to say that a slightly more value-oriented path may be ahead for BCB Bancorp stock in the near term too.

P/S Ratio

Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.

Right now, BCB Bancorp has a P/S ratio of about 1.94. This is lower than the S&P 500 average, which comes in at 5.07 right now. Also, as we can see in the chart below, this is below the highs for this stock in particular over the past few years.

If anything, BCBP is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.

Broad Value Outlook

In aggregate,BCB Bancorp currently has a Zacks Value Score of A, putting it into the top 20% of all stocks we cover from this look. This makes BCB Bancorp a solid choice for value investors.

What About the Stock Overall?

Though BCB Bancorp might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth Score of F and a Momentum Score of C. This gives BCBP a Zacks VGM score — or its overarching fundamental grade — of A. (You can read more about the Zacks Style Scores here >>)

Meanwhile, the company’s recent earnings estimates have been encouraging. The current year has seen five estimates go higher in the past sixty days compared to three lower, while the full year 2021 estimate has seen three upward revision compared to one downward in the same time period.

This has had a positive impact on the consensus estimate though as the current year consensus estimate has risen by 19.7% in the past two months, while the full year 2021 estimate has improved by 1.4%. You can see the consensus estimate trend and recent price action for the stock in the chart below:

BCB Bancorp, Inc. NJ Price and Consensus

BCB Bancorp, Inc. NJ Price and Consensus
BCB Bancorp, Inc. NJ Price and Consensus

BCB Bancorp, Inc. NJ price-consensus-chart | BCB Bancorp, Inc. NJ Quote

This bullish trend is why the stock boasts a Zacks Rank #1 (Strong Buy) and why we are expecting outperformance from the company in the near term.

Bottom Line

BCB Bancorp is an inspired choice for value investors, as it is hard to beat its incredible line up of statistics on this front. A strong industry rank (among top 23% of more than 250 industries) and a Zacks Rank #1 further instils our confidence.

However, over the past two years, the Zacks Banks - Northeast industry has clearly underperformed the market at large, as you can see below:

So, value investors might want to wait for industry trends to turn around in this name first, but once that happens, this stock could be a compelling pick.

5G Revolution: 3 Stocks to Make Your Move

With super high data speed, it will make current cell phones obsolete and unlock the full potential of big data, cloud computing, and artificial intelligence. In the next few years this industry is predicted to create 22 million jobs and a stunning $12.3 trillion in revenue.

Today you have an historic chance to pursue almost unimaginable gains like Microsoft, Netflix, and Apple in their early phases. Zacks has released a Special Report that reveals our . . .

Smartest stock for 5G telecom
Safest investment in 5G hardware
Single best 5G buy of all!

Download now. Today the report is FREE >>


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

BCB Bancorp, Inc. NJ (BCBP) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research