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CVCY or CVBF: Which Is the Better Value Stock Right Now?

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Zacks Equity Research
Northern Trust (NTRS) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
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Investors looking for stocks in the Banks - West sector might want to consider either Central Valley Community Bancorp (CVCY) or CVB Financial (CVBF). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Central Valley Community Bancorp is sporting a Zacks Rank of #2 (Buy), while CVB Financial has a Zacks Rank of #4 (Sell). This means that CVCY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

CVCY currently has a forward P/E ratio of 14.42, while CVBF has a forward P/E of 17.95. We also note that CVCY has a PEG ratio of 1.80. 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. CVBF currently has a PEG ratio of 1.89.

Another notable valuation metric for CVCY is its P/B ratio of 1.41. 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, CVBF has a P/B of 2.32.

These metrics, and several others, help CVCY earn a Value grade of B, while CVBF has been given a Value grade of C.

CVCY has seen stronger estimate revision activity and sports more attractive valuation metrics than CVBF, so it seems like value investors will conclude that CVCY is the superior option right now.


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Central Valley Community Bancorp (CVCY) : Free Stock Analysis Report
 
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