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NCBS vs. CBU: Which Stock Is the Better Value Option?

Zacks Equity Research

Investors looking for stocks in the Banks - Northeast sector might want to consider either Nicolet Bankshares (NCBS) or Community Bank System (CBU). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Right now, Nicolet Bankshares is sporting a Zacks Rank of #2 (Buy), while Community Bank System has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NCBS is likely seeing its earnings outlook improve to a greater extent. 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.

NCBS currently has a forward P/E ratio of 13.18, while CBU has a forward P/E of 19.56. We also note that NCBS has a PEG ratio of 1.88. 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. CBU currently has a PEG ratio of 2.44.

Another notable valuation metric for NCBS is its P/B ratio of 1.42. 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, CBU has a P/B of 1.88.

These metrics, and several others, help NCBS earn a Value grade of B, while CBU has been given a Value grade of D.

NCBS stands above CBU thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NCBS is the superior value option right now.


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Nicolet Bankshares Inc. (NCBS) : Free Stock Analysis Report
 
Community Bank System, Inc. (CBU) : Free Stock Analysis Report
 
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