PB vs. CFR: Which Stock Is the Better Value Option?
Investors with an interest in Banks - Southwest stocks have likely encountered both Prosperity Bancshares (PB) and Cullen/Frost Bankers (CFR). 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Prosperity Bancshares and Cullen/Frost Bankers are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PB has an improving earnings outlook. 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.
PB currently has a forward P/E ratio of 12.05, while CFR has a forward P/E of 16.04. We also note that PB has a PEG ratio of 1.20. 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. CFR currently has a PEG ratio of 1.69.
Another notable valuation metric for PB is its P/B ratio of 1.01. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CFR has a P/B of 1.59.
These metrics, and several others, help PB earn a Value grade of B, while CFR has been given a Value grade of C.
PB has seen stronger estimate revision activity and sports more attractive valuation metrics than CFR, so it seems like value investors will conclude that PB is the superior option right now.
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Prosperity Bancshares, Inc. (PB) : Free Stock Analysis Report
CullenFrost Bankers, Inc. (CFR) : Free Stock Analysis Report
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