Investors interested in stocks from the Financial - Savings and Loan sector have probably already heard of Citizens Financial Group (CFG) and Flushing Financial (FFIC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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.
Right now, Citizens Financial Group is sporting a Zacks Rank of #2 (Buy), while Flushing Financial has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CFG likely has seen a stronger improvement to its earnings outlook than FFIC has recently. But this is only part of the picture 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.
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.
CFG currently has a forward P/E ratio of 8.92, while FFIC has a forward P/E of 12.20. We also note that CFG has a PEG ratio of 1.11. 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. FFIC currently has a PEG ratio of 3.05.
Another notable valuation metric for CFG is its P/B ratio of 0.78. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, FFIC has a P/B of 1.06.
These are just a few of the metrics contributing to CFG's Value grade of A and FFIC's Value grade of C.
CFG has seen stronger estimate revision activity and sports more attractive valuation metrics than FFIC, so it seems like value investors will conclude that CFG is the superior option right now.
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Citizens Financial Group, Inc. (CFG) : Free Stock Analysis Report
Flushing Financial Corporation (FFIC) : Free Stock Analysis Report
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