Investors interested in Banks - Northeast stocks are likely familiar with Atlantic Capital Bancshares (ACBI) and Independent Bank Corp. (INDB). 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.
Atlantic Capital Bancshares has a Zacks Rank of #2 (Buy), while Independent Bank Corp. has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ACBI has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
ACBI currently has a forward P/E ratio of 14.39, while INDB has a forward P/E of 17.30. We also note that ACBI has a PEG ratio of 1.22. 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. INDB currently has a PEG ratio of 9.61.
Another notable valuation metric for ACBI is its P/B ratio of 0.72. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, INDB has a P/B of 1.26.
These are just a few of the metrics contributing to ACBI's Value grade of A and INDB's Value grade of D.
ACBI is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ACBI is likely the superior value option right now.
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Atlantic Capital Bancshares, Inc. (ACBI) : Free Stock Analysis Report
Independent Bank Corp. (INDB) : Free Stock Analysis Report
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