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OZK vs. TSC: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Banks - Northeast sector might want to consider either Bank OZK (OZK - Free Report) or TriState Capital . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Bank OZK has a Zacks Rank of #2 (Buy), while TriState Capital has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that OZK is likely seeing its earnings outlook improve to a greater extent. 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 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.

OZK currently has a forward P/E ratio of 8.63, while TSC has a forward P/E of 11.03. We also note that OZK has a PEG ratio of 0.72. 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. TSC currently has a PEG ratio of 0.92.

Another notable valuation metric for OZK is its P/B ratio of 1.01. 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, TSC has a P/B of 1.38.

These are just a few of the metrics contributing to OZK's Value grade of A and TSC's Value grade of C.

OZK stands above TSC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that OZK is the superior value option right now.


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