Investors looking for stocks in the Banks - West sector might want to consider either Sierra Bancorp (BSRR) or Bank of Hawaii (BOH). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Sierra Bancorp has a Zacks Rank of #2 (Buy), while Bank of Hawaii has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BSRR has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
BSRR currently has a forward P/E ratio of 12.04, while BOH has a forward P/E of 14.58. We also note that BSRR has a PEG ratio of 1.50. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BOH currently has a PEG ratio of 1.94.
Another notable valuation metric for BSRR is its P/B ratio of 1.46. 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, BOH has a P/B of 2.63.
These are just a few of the metrics contributing to BSRR's Value grade of B and BOH's Value grade of C.
BSRR stands above BOH thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BSRR is the superior value option right now.
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Sierra Bancorp (BSRR) : Free Stock Analysis Report
Bank of Hawaii Corporation (BOH) : Free Stock Analysis Report
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