EWBC vs. BOH: Which Stock Is the Better Value Option?
Investors with an interest in Banks - West stocks have likely encountered both East West Bancorp (EWBC) and Bank of Hawaii (BOH). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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 has a Zacks Rank of #2 (Buy), while Bank of Hawaii has a Zacks Rank of #4 (Sell) right now. This means that EWBC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
EWBC currently has a forward P/E ratio of 6.61, while BOH has a forward P/E of 10.77. We also note that EWBC has a PEG ratio of 0.66. 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. BOH currently has a PEG ratio of 1.35.
Another notable valuation metric for EWBC is its P/B ratio of 1.42. 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, BOH has a P/B of 1.88.
These metrics, and several others, help EWBC earn a Value grade of A, while BOH has been given a Value grade of C.
EWBC has seen stronger estimate revision activity and sports more attractive valuation metrics than BOH, so it seems like value investors will conclude that EWBC is the superior option right now.
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East West Bancorp, Inc. (EWBC) : Free Stock Analysis Report
Bank of Hawaii Corporation (BOH) : Free Stock Analysis Report
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