Investors interested in stocks from the Banks - Midwest sector have probably already heard of Civista Bancshares (CIVB) and Lakeland Financial (LKFN). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Civista Bancshares has a Zacks Rank of #1 (Strong Buy), while Lakeland Financial has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CIVB is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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 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.
CIVB currently has a forward P/E ratio of 10.75, while LKFN has a forward P/E of 14.60. We also note that CIVB has a PEG ratio of 1.34. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. LKFN currently has a PEG ratio of 1.46.
Another notable valuation metric for CIVB is its P/B ratio of 1.18. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, LKFN has a P/B of 2.44.
Based on these metrics and many more, CIVB holds a Value grade of B, while LKFN has a Value grade of C.
CIVB stands above LKFN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CIVB is the superior value option right now.
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Civista Bancshares, Inc. (CIVB) : Free Stock Analysis Report
Lakeland Financial Corporation (LKFN) : Free Stock Analysis Report
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