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

Zacks Equity Research
Adobe Systems (ADBE) closed at $306.87 in the latest trading session, marking a -1.04% move from the prior day.

Investors with an interest in Banks - Midwest stocks have likely encountered both TCF Financial (TCF) and Commerce Bancshares (CBSH). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, TCF Financial has a Zacks Rank of #2 (Buy), while Commerce Bancshares has a Zacks Rank of #3 (Hold). This means that TCF's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

TCF currently has a forward P/E ratio of 11.44, while CBSH has a forward P/E of 16. We also note that TCF 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. CBSH currently has a PEG ratio of 3.68.

Another notable valuation metric for TCF is its P/B ratio of 1.54. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, CBSH has a P/B of 2.43.

These metrics, and several others, help TCF earn a Value grade of B, while CBSH has been given a Value grade of D.

TCF sticks out from CBSH in both our Zacks Rank and Style Scores models, so value investors will likely feel that TCF is the better option right now.


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TCF Financial Corporation (TCF) : Free Stock Analysis Report
 
Commerce Bancshares, Inc. (CBSH) : Free Stock Analysis Report
 
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