Investors with an interest in Banks - Northeast stocks have likely encountered both 1st Constitution Bancorp (FCCY) and Nicolet Bankshares (NCBS). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
1st Constitution Bancorp has a Zacks Rank of #1 (Strong Buy), while Nicolet Bankshares has a Zacks Rank of #5 (Strong Sell) right now. Investors should feel comfortable knowing that FCCY likely has seen a stronger improvement to its earnings outlook than NCBS has recently. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
FCCY currently has a forward P/E ratio of 12.27, while NCBS has a forward P/E of 13.43. We also note that FCCY has a PEG ratio of 1.53. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NCBS currently has a PEG ratio of 1.92.
Another notable valuation metric for FCCY is its P/B ratio of 1.36. 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, NCBS has a P/B of 1.38.
Based on these metrics and many more, FCCY holds a Value grade of B, while NCBS has a Value grade of C.
FCCY sticks out from NCBS in both our Zacks Rank and Style Scores models, so value investors will likely feel that FCCY is the better option right now.
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1st Constitution Bancorp (NJ) (FCCY) : Free Stock Analysis Report
Nicolet Bankshares Inc. (NCBS) : Free Stock Analysis Report
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