Investors with an interest in Financial - Savings and Loan stocks have likely encountered both OceanFirst Financial (OCFC) and Provident Financial (PFS). 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.
Currently, OceanFirst Financial has a Zacks Rank of #2 (Buy), while Provident Financial has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that OCFC likely has seen a stronger improvement to its earnings outlook than PFS has recently. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
OCFC currently has a forward P/E ratio of 11.13, while PFS has a forward P/E of 12.77. We also note that OCFC has a PEG ratio of 1.11. 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. PFS currently has a PEG ratio of 1.60.
Another notable valuation metric for OCFC is its P/B ratio of 1.11. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, PFS has a P/B of 1.17.
These are just a few of the metrics contributing to OCFC's Value grade of B and PFS's Value grade of C.
OCFC is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that OCFC is likely the superior value option right now.
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OceanFirst Financial Corp. (OCFC) : Free Stock Analysis Report
Provident Financial Services, Inc (PFS) : Free Stock Analysis Report
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