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CUBI vs. UBSI: Which Stock Is the Better Value Option?

Zacks Equity Research

Investors with an interest in Banks - Southeast stocks have likely encountered both Customers Bancorp (CUBI) and United Bankshares (UBSI). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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

Customers Bancorp and United Bankshares are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This means that CUBI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

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.

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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.

CUBI currently has a forward P/E ratio of 9.71, while UBSI has a forward P/E of 14.67. We also note that CUBI has a PEG ratio of 0.97. 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. UBSI currently has a PEG ratio of 1.83.

Another notable valuation metric for CUBI is its P/B ratio of 0.76. 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, UBSI has a P/B of 1.14.

Based on these metrics and many more, CUBI holds a Value grade of B, while UBSI has a Value grade of C.

CUBI 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 CUBI is likely the superior value option right now.


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Customers Bancorp, Inc (CUBI) : Free Stock Analysis Report
 
United Bankshares, Inc. (UBSI) : Free Stock Analysis Report
 
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Zacks Investment Research