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EWBC vs. SIVB: Which Stock Should Value Investors Buy Now?

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Investors interested in Banks - West stocks are likely familiar with East West Bancorp (EWBC) and SVB Financial (SIVB). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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.

Currently, East West Bancorp has a Zacks Rank of #2 (Buy), while SVB Financial has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that EWBC has an improving earnings 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.

EWBC currently has a forward P/E ratio of 12.24, while SIVB has a forward P/E of 18.18. We also note that EWBC has a PEG ratio of 1.22. 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. SIVB currently has a PEG ratio of 2.27.

Another notable valuation metric for EWBC is its P/B ratio of 1.86. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, SIVB has a P/B of 3.10.

These are just a few of the metrics contributing to EWBC's Value grade of B and SIVB's Value grade of C.

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


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East West Bancorp, Inc. (EWBC) : Free Stock Analysis Report
 
SVB Financial Group (SIVB) : Free Stock Analysis Report
 
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Zacks Investment Research