EWBC vs. CVBF: Which Stock Should Value Investors Buy Now?
Investors interested in Banks - West stocks are likely familiar with East West Bancorp (EWBC) and 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.
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 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.
Both East West Bancorp and CVB Financial have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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 12.93, while CVBF has a forward P/E of 18.11. We also note that EWBC has a PEG ratio of 1.23. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CVBF currently has a PEG ratio of 1.91.
Another notable valuation metric for EWBC is its P/B ratio of 2.17. 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, CVBF has a P/B of 2.40.
Based on these metrics and many more, EWBC holds a Value grade of B, while CVBF has a Value grade of C.
Both EWBC and CVBF 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
CVB Financial Corporation (CVBF) : Free Stock Analysis Report
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