USB vs. BNY: Which Stock Should Value Investors Buy Now?
Investors with an interest in Banks - Major Regional stocks have likely encountered both U.S. Bancorp (USB) and BNYBNY-- (BNY). But which of these two stocks presents investors with the better value opportunity right now? 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
U.S. Bancorp and BNY are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that USB'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 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
USB currently has a forward P/E ratio of 12.05, while BNY has a forward P/E of 17.57. We also note that USBUSB-- has a PEG ratio of 1.12. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BNY currently has a PEG ratio of 1.22.
Another notable valuation metric for USB is its P/B ratio of 1.6. 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, BNY has a P/B of 2.72.
Based on these metrics and many more, USB holds a Value grade of B, while BNY has a Value grade of F.
USB sticks out from BNY in both our Zacks Rank and Style Scores models, so value investors will likely feel that USB is the better option right now.
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U.S. Bancorp (USB): Free Stock Analysis Report
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