Investors looking for stocks in the Financial - Savings and Loan sector might want to consider either BankFinancial (BFIN) or Northwest Bancshares (NWBI). But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, BankFinancial has a Zacks Rank of #2 (Buy), while Northwest Bancshares has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that BFIN likely has seen a stronger improvement to its earnings outlook than NWBI has recently. 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BFIN currently has a forward P/E ratio of 15.40, while NWBI has a forward P/E of 15.90. We also note that BFIN has a PEG ratio of 1.93. 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. NWBI currently has a PEG ratio of 2.27.
Another notable valuation metric for BFIN is its P/B ratio of 1.36. 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, NWBI has a P/B of 1.37.
These are just a few of the metrics contributing to BFIN's Value grade of B and NWBI's Value grade of D.
BFIN is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BFIN is likely the superior value option right now.
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BankFinancial Corporation (BFIN) : Free Stock Analysis Report
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