EWBC vs. BOH: Which Stock Is the Better Value Option?
Investors interested in stocks from the Banks - West sector have probably already heard of 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
East West Bancorp has a Zacks Rank of #2 (Buy), while Bank of Hawaii has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EWBC is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
EWBC currently has a forward P/E ratio of 9.85, while BOH has a forward P/E of 13.98. We also note that EWBC has a PEG ratio of 0.99. 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 1.75.
Another notable valuation metric for EWBC is its P/B ratio of 1.72. 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 2.46.
These metrics, and several others, help EWBC earn a Value grade of B, while BOH has been given a Value grade of C.
EWBC stands above BOH thanks to its solid earnings outlook, and based on these valuation figures, we also 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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