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TCBK vs. BMRC: Which Stock Should Value Investors Buy Now?

Zacks Equity Research

Investors interested in Banks - West stocks are likely familiar with TriCo (TCBK) and Bank of Marin (BMRC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

TriCo and Bank of Marin are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that TCBK likely has seen a stronger improvement to its earnings outlook than BMRC has recently. But this is only part of the picture for value investors.

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.

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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.

TCBK currently has a forward P/E ratio of 12.62, while BMRC has a forward P/E of 16.94. We also note that TCBK has a PEG ratio of 1.80. 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. BMRC currently has a PEG ratio of 2.42.

Another notable valuation metric for TCBK is its P/B ratio of 1.35. 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, BMRC has a P/B of 1.77.

These are just a few of the metrics contributing to TCBK's Value grade of B and BMRC's Value grade of D.

TCBK has seen stronger estimate revision activity and sports more attractive valuation metrics than BMRC, so it seems like value investors will conclude that TCBK is the superior option right now.


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TriCo Bancshares (TCBK) : Free Stock Analysis Report
 
Bank of Marin Bancorp (BMRC) : Free Stock Analysis Report
 
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