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First Commonwealth Financial Corporation (FCF) - free report >>
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First Commonwealth Financial Corporation (FCF) - free report >>
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FCCY vs. FCF: Which Stock Is the Better Value Option?
Investors looking for stocks in the Banks - Northeast sector might want to consider either 1st Constitution Bancorp or First Commonwealth Financial (FCF - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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, 1st Constitution Bancorp is sporting a Zacks Rank of #1 (Strong Buy), while First Commonwealth Financial has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that FCCY likely has seen a stronger improvement to its earnings outlook than FCF has recently. But this is only part of the picture for value investors.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
FCCY currently has a forward P/E ratio of 12.40, while FCF has a forward P/E of 13.70. We also note that FCCY has a PEG ratio of 1.55. 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. FCF currently has a PEG ratio of 1.71.
Another notable valuation metric for FCCY is its P/B ratio of 1.33. 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, FCF has a P/B of 1.44.
These are just a few of the metrics contributing to FCCY's Value grade of B and FCF's Value grade of C.
FCCY sticks out from FCF in both our Zacks Rank and Style Scores models, so value investors will likely feel that FCCY is the better option right now.