Investors with an interest in Banks - Southeast stocks have likely encountered both Hancock Whitney (HWC) and First Bancorp (FBNC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Right now, both Hancock Whitney and First Bancorp are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.
HWC currently has a forward P/E ratio of 10.40, while FBNC has a forward P/E of 12.39. We also note that HWC has a PEG ratio of 1.30. 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. FBNC currently has a PEG ratio of 2.53.
Another notable valuation metric for HWC is its P/B ratio of 1.19. 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, FBNC has a P/B of 1.46.
Based on these metrics and many more, HWC holds a Value grade of B, while FBNC has a Value grade of C.
Both HWC and FBNC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HWC is the superior value option right now.
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Hancock Whitney Corporation (HWC) : Free Stock Analysis Report
First Bancorp (FBNC) : Free Stock Analysis Report
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