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MSBI vs. CBFV: Which Stock Is the Better Value Option?

Zacks Equity Research
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Investors looking for stocks in the Banks - Northeast sector might want to consider either Midland States Bancorp, Inc. (MSBI) or CB Financial Services (CBFV). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Midland States Bancorp, Inc. and CB Financial Services are sporting Zacks Ranks of #2 (Buy) and #5 (Strong Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MSBI has an improving earnings 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

MSBI currently has a forward P/E ratio of 14.34, while CBFV has a forward P/E of 20.77. We also note that MSBI has a PEG ratio of 2.05. 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. CBFV currently has a PEG ratio of 2.08.

Another notable valuation metric for MSBI is its P/B ratio of 1.41. 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, CBFV has a P/B of 1.43.

These are just a few of the metrics contributing to MSBI's Value grade of B and CBFV's Value grade of F.

MSBI has seen stronger estimate revision activity and sports more attractive valuation metrics than CBFV, so it seems like value investors will conclude that MSBI is the superior option right now.

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Midland States Bancorp, Inc. (MSBI) : Free Stock Analysis Report
CB Financial Services, Inc. (CBFV) : Free Stock Analysis Report
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