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

Zacks Equity Research
Iron Mountain (IRM) closed at $30.54 in the latest trading session, marking a +1.29% move from the prior day.

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 companies is the best option for those looking for undervalued stocks? Let's 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Nicolet Bankshares and Community Bank System are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

NCBS currently has a forward P/E ratio of 13.09, while CBU has a forward P/E of 20.08. We also note that NCBS has a PEG ratio of 1.87. 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 2.51.

Another notable valuation metric for NCBS is its P/B ratio of 1.45. 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 1.93.

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

Both NCBS and CBU are impressive stocks with solid earnings outlooks, but based on these valuation figures, we 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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