Investors interested in Banks - West stocks are likely familiar with Central Valley Community Bancorp (CVCY) and Columbia Banking (COLB). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Central Valley Community Bancorp has a Zacks Rank of #2 (Buy), while Columbia Banking has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CVCY likely has seen a stronger improvement to its earnings outlook than COLB has recently. 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CVCY currently has a forward P/E ratio of 12.63, while COLB has a forward P/E of 13.50. We also note that CVCY has a PEG ratio of 1.58. 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. COLB currently has a PEG ratio of 1.93.
Another notable valuation metric for CVCY 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, COLB has a P/B of 1.21.
These are just a few of the metrics contributing to CVCY's Value grade of B and COLB's Value grade of C.
CVCY stands above COLB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CVCY is the superior value option right now.
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Central Valley Community Bancorp (CVCY) : Free Stock Analysis Report
Columbia Banking System, Inc. (COLB) : Free Stock Analysis Report
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