Investors interested in Banks - Northeast stocks are likely familiar with 1st Constitution Bancorp (FCCY) and Community Bank System (CBU). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, 1st Constitution Bancorp has a Zacks Rank of #2 (Buy), while Community Bank System has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that FCCY is likely seeing its earnings outlook improve to a greater extent. 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 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.
FCCY currently has a forward P/E ratio of 11.94, while CBU has a forward P/E of 19.85. We also note that FCCY has a PEG ratio of 1.49. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CBU currently has a PEG ratio of 2.48.
Another notable valuation metric for FCCY is its P/B ratio of 1.31. 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, CBU has a P/B of 1.95.
These metrics, and several others, help FCCY earn a Value grade of B, while CBU has been given a Value grade of D.
FCCY stands above CBU thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FCCY is the superior value option right now.
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1st Constitution Bancorp (NJ) (FCCY) : Free Stock Analysis Report
Community Bank System, Inc. (CBU) : Free Stock Analysis Report
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