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WTFC vs. UMBF: Which Stock Is the Better Value Option?

·2 min read

Investors looking for stocks in the Banks - Midwest sector might want to consider either Wintrust Financial (WTFC) or UMB Financial (UMBF). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Wintrust Financial is sporting a Zacks Rank of #2 (Buy), while UMB Financial has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that WTFC is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

WTFC currently has a forward P/E ratio of 13.22, while UMBF has a forward P/E of 17.10. We also note that WTFC has a PEG ratio of 0.78. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. UMBF currently has a PEG ratio of 3.79.

Another notable valuation metric for WTFC is its P/B ratio of 0.78. 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, UMBF has a P/B of 0.98.

Based on these metrics and many more, WTFC holds a Value grade of A, while UMBF has 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
 
UMB Financial Corporation (UMBF) : Free Stock Analysis Report
 
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Zacks Investment Research