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EWBC or BOH: Which Is the Better Value Stock Right Now?

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Zacks Equity Research
·2 min read
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Investors interested in Banks - West stocks are likely familiar with East West Bancorp (EWBC) and Bank of Hawaii (BOH). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 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, both East West Bancorp and Bank of Hawaii are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

EWBC currently has a forward P/E ratio of 11.70, while BOH has a forward P/E of 18.02. We also note that EWBC has a PEG ratio of 1.17. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BOH currently has a PEG ratio of 2.25.

Another notable valuation metric for EWBC is its P/B ratio of 1.22. 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, BOH has a P/B of 2.15.

Based on these metrics and many more, EWBC holds a Value grade of B, while BOH has a Value grade of C.

Both EWBC and BOH are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that EWBC is the superior value option right now.

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East West Bancorp, Inc. (EWBC) : Free Stock Analysis Report
Bank of Hawaii Corporation (BOH) : Free Stock Analysis Report
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Zacks Investment Research