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PEBO vs. CBSH: Which Stock Is the Better Value Option?

Zacks Equity Research
Dividends are one of the best benefits to being a shareholder, but finding a great dividend stock is no easy task. Does Eaton Vance (EV) have what it takes? Let's find out.

Investors looking for stocks in the Banks - Midwest sector might want to consider either Peoples Bancorp (PEBO) or Commerce Bancshares (CBSH). 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, Peoples Bancorp has a Zacks Rank of #2 (Buy), while Commerce Bancshares has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that PEBO likely has seen a stronger improvement to its earnings outlook than CBSH has recently. But this is only part of the picture for value investors.

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 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.

PEBO currently has a forward P/E ratio of 12.59, while CBSH has a forward P/E of 14.78. We also note that PEBO has a PEG ratio of 1.57. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CBSH currently has a PEG ratio of 1.73.

Another notable valuation metric for PEBO is its P/B ratio of 1.16. 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, CBSH has a P/B of 2.34.

These are just a few of the metrics contributing to PEBO's Value grade of B and CBSH's Value grade of C.

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


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Peoples Bancorp Inc. (PEBO) : Free Stock Analysis Report
 
Commerce Bancshares, Inc. (CBSH) : Free Stock Analysis Report
 
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