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WTFC vs. LKFN: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
PEBO vs. FIBK: Which Stock Is the Better Value Option?
PEBO vs. FIBK: Which Stock Is the Better Value Option?

Investors looking for stocks in the Banks - Midwest sector might want to consider either Wintrust Financial (WTFC) or Lakeland Financial (LKFN). 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.

Wintrust Financial and Lakeland Financial 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 WTFC has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

WTFC currently has a forward P/E ratio of 12.86, while LKFN has a forward P/E of 14.35. We also note that WTFC has a PEG ratio of 0.95. 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. LKFN currently has a PEG ratio of 1.44.

Another notable valuation metric for WTFC is its P/B ratio of 1.44. 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, LKFN has a P/B of 2.24.

These metrics, and several others, help WTFC earn a Value grade of B, while LKFN has been given a Value grade of C.

WTFC 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 WTFC is likely the superior value option right now.


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Wintrust Financial Corporation (WTFC) : Free Stock Analysis Report
 
Lakeland Financial Corporation (LKFN) : Free Stock Analysis Report
 
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Zacks Investment Research