PNFP vs. CHCO: Which Stock Is the Better Value Option?
Investors interested in stocks from the Banks - Southeast sector have probably already heard of Pinnacle Financial (PNFP) and City Holding (CHCO). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Pinnacle Financial has a Zacks Rank of #2 (Buy), while City Holding has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PNFP has an improving earnings outlook. 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 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.
PNFP currently has a forward P/E ratio of 10.80, while CHCO has a forward P/E of 14.49. We also note that PNFP has a PEG ratio of 0.77. 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. CHCO currently has a PEG ratio of 1.81.
Another notable valuation metric for PNFP is its P/B ratio of 1.05. 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, CHCO has a P/B of 2.01.
Based on these metrics and many more, PNFP holds a Value grade of B, while CHCO has a Value grade of C.
PNFP sticks out from CHCO in both our Zacks Rank and Style Scores models, so value investors will likely feel that PNFP is the better option right now.
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Pinnacle Financial Partners, Inc. (PNFP) : Free Stock Analysis Report
City Holding Company (CHCO) : Free Stock Analysis Report
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