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WTFC or CBSH: Which Is the Better Value Stock Right Now?

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Investors interested in Banks - Midwest stocks are likely familiar with Wintrust Financial (WTFC - Free Report) and Commerce Bancshares (CBSH - 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Both Wintrust Financial and Commerce Bancshares have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.

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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

WTFC currently has a forward P/E ratio of 14.06, while CBSH has a forward P/E of 21.20. We also note that WTFC has a PEG ratio of 0.83. 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. CBSH currently has a PEG ratio of 1.83.

Another notable valuation metric for WTFC is its P/B ratio of 1.18. 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, CBSH has a P/B of 2.64.

Based on these metrics and many more, WTFC holds a Value grade of B, while CBSH has a Value grade of D.

Both WTFC and CBSH are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that WTFC is the superior value option right now.


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Commerce Bancshares, Inc. (CBSH) - free report >>

Wintrust Financial Corporation (WTFC) - free report >>

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