Investors interested in Banks - West stocks are likely familiar with East West Bancorp (EWBC) and Bank of Hawaii (BOH). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
East West Bancorp and Bank of Hawaii are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that EWBC has an improving earnings outlook. But this is just one factor that value investors are interested in.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
EWBC currently has a forward P/E ratio of 12.27, while BOH has a forward P/E of 21.53. We also note that EWBC has a PEG ratio of 2.99. 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. BOH currently has a PEG ratio of 4.97.
Another notable valuation metric for EWBC is its P/B ratio of 1.86. 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, BOH has a P/B of 2.28.
Based on these metrics and many more, EWBC holds a Value grade of B, while BOH has a Value grade of C.
EWBC stands above BOH thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EWBC is the superior value option right now.
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Bank of Hawaii Corporation (BOH) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
