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EQBK vs. FCF: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Investors looking for stocks in the Banks - Northeast sector might want to consider either Equity Bancshares (EQBK) or First Commonwealth Financial (FCF). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Equity Bancshares is sporting a Zacks Rank of #2 (Buy), while First Commonwealth Financial has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that EQBK likely has seen a stronger improvement to its earnings outlook than FCF has recently. But this is just one factor that value investors are interested in.

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.

EQBK currently has a forward P/E ratio of 10.81, while FCF has a forward P/E of 11.76. We also note that EQBK has a PEG ratio of 1.08. 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. FCF currently has a PEG ratio of 1.47.

Another notable valuation metric for EQBK is its P/B ratio of 1.21. 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, FCF has a P/B of 1.32.

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

EQBK sticks out from FCF in both our Zacks Rank and Style Scores models, so value investors will likely feel that EQBK is the better option right now.


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Equity Bancshares, Inc. (EQBK) : Free Stock Analysis Report
 
First Commonwealth Financial Corporation (FCF) : Free Stock Analysis Report
 
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