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

Zacks Equity Research
Nicolet Bankshares (NCBS) delivered earnings and revenue surprises of 21.43% and 25.34%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?

Investors interested in Banks - Midwest stocks are likely familiar with Macatawa Bank (MCBC) and 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.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Macatawa Bank is sporting a Zacks Rank of #2 (Buy), while Commerce Bancshares has a Zacks Rank of #5 (Strong Sell). This means that MCBC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 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.

MCBC currently has a forward P/E ratio of 12.48, while CBSH has a forward P/E of 16.25. We also note that MCBC has a PEG ratio of 1.56. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CBSH currently has a PEG ratio of 2.03.

Another notable valuation metric for MCBC is its P/B ratio of 1.80. 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, CBSH has a P/B of 2.27.

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

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


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Macatawa Bank Corporation (MCBC) : Free Stock Analysis Report
 
Commerce Bancshares, Inc. (CBSH) : Free Stock Analysis Report
 
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