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FBIZ or CBSH: Which Is the Better Value Stock Right Now?

Zacks Equity Research
Starbucks (SBUX) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.

Investors looking for stocks in the Banks - Midwest sector might want to consider either First Business Financial Services (FBIZ) or Commerce Bancshares (CBSH). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

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.

First Business Financial Services has a Zacks Rank of #2 (Buy), while Commerce Bancshares has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FBIZ has 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.

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.

FBIZ currently has a forward P/E ratio of 10.95, while CBSH has a forward P/E of 16.63. We also note that FBIZ has a PEG ratio of 1.37. 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. CBSH currently has a PEG ratio of 3.82.

Another notable valuation metric for FBIZ is its P/B ratio of 1.11. 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, CBSH has a P/B of 2.53.

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

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


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First Business Financial Services, Inc. (FBIZ) : Free Stock Analysis Report
 
Commerce Bancshares, Inc. (CBSH) : Free Stock Analysis Report
 
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