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OPBK vs. BANF: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
Cathay (CATY) delivered earnings and revenue surprises of 2.47% and 2.05%, respectively, for the quarter ended March 2019. Do the numbers hold clues to what lies ahead for the stock?

Investors interested in stocks from the Banks - Southwest sector have probably already heard of OP Bancorp (OPBK) and BancFirst (BANF). 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.

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.

Right now, OP Bancorp is sporting a Zacks Rank of #2 (Buy), while BancFirst has a Zacks Rank of #3 (Hold). This means that OPBK's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

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 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.

OPBK currently has a forward P/E ratio of 9.93, while BANF has a forward P/E of 14.26. We also note that OPBK has a PEG ratio of 0.99. 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. BANF currently has a PEG ratio of 2.04.

Another notable valuation metric for OPBK is its P/B ratio of 1.14. 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, BANF has a P/B of 1.99.

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

OPBK 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 OPBK is likely the superior value option right now.


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