Investors looking for stocks in the Banks - Northeast sector might want to consider either 1st Constitution Bancorp (FCCY) or First Commonwealth Financial (FCF). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, 1st Constitution Bancorp is sporting a Zacks Rank of #1 (Strong Buy), while First Commonwealth Financial has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that FCCY likely has seen a stronger improvement to its earnings outlook than FCF has recently. But this is just one piece of the puzzle 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.
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.
FCCY currently has a forward P/E ratio of 11.21, while FCF has a forward P/E of 12.08. We also note that FCCY has a PEG ratio of 1.40. 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. FCF currently has a PEG ratio of 1.51.
Another notable valuation metric for FCCY is its P/B ratio of 1.18. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, FCF has a P/B of 1.27.
These metrics, and several others, help FCCY earn a Value grade of B, while FCF has been given a Value grade of C.
FCCY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that FCCY is likely the superior value option right now.
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1st Constitution Bancorp (NJ) (FCCY) : Free Stock Analysis Report
First Commonwealth Financial Corporation (FCF) : Free Stock Analysis Report
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