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PB vs. TCBI: Which Stock Should Value Investors Buy Now?
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Investors with an interest in Banks - Southwest stocks have likely encountered both Prosperity Bancshares (PB - Free Report) and Texas Capital (TCBI - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Prosperity Bancshares has a Zacks Rank of #2 (Buy), while Texas Capital has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PB is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
PB currently has a forward P/E ratio of 13.97, while TCBI has a forward P/E of 16.70. We also note that PB has a PEG ratio of 1.40. 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. TCBI currently has a PEG ratio of 2.09.
Another notable valuation metric for PB is its P/B ratio of 1.10. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, TCBI has a P/B of 1.29.
These are just a few of the metrics contributing to PB's Value grade of B and TCBI's Value grade of C.
PB stands above TCBI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PB is the superior value option right now.
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PB vs. TCBI: Which Stock Should Value Investors Buy Now?
Investors with an interest in Banks - Southwest stocks have likely encountered both Prosperity Bancshares (PB - Free Report) and Texas Capital (TCBI - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Prosperity Bancshares has a Zacks Rank of #2 (Buy), while Texas Capital has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PB is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
PB currently has a forward P/E ratio of 13.97, while TCBI has a forward P/E of 16.70. We also note that PB has a PEG ratio of 1.40. 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. TCBI currently has a PEG ratio of 2.09.
Another notable valuation metric for PB is its P/B ratio of 1.10. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, TCBI has a P/B of 1.29.
These are just a few of the metrics contributing to PB's Value grade of B and TCBI's Value grade of C.
PB stands above TCBI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PB is the superior value option right now.