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RF vs. SNV: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Banks - Southeast sector have probably already heard of Regions Financial (RF - Free Report) and Synovus Financial (SNV - 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.

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.

Regions Financial and Synovus Financial are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings 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.

RF currently has a forward P/E ratio of 11.25, while SNV has a forward P/E of 12.62. We also note that RF has a PEG ratio of 0.51. 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. SNV currently has a PEG ratio of 1.58.

Another notable valuation metric for RF is its P/B ratio of 1.24. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, SNV has a P/B of 1.47.

Based on these metrics and many more, RF holds a Value grade of A, while SNV has a Value grade of C.

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


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Regions Financial Corporation (RF) - free report >>

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