FITB vs. NTRS: Which Stock Is the Better Value Option?
Investors with an interest in Banks - Major Regional stocks have likely encountered both Fifth Third Bancorp (FITB) and Northern Trust Corporation (NTRS). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Fifth Third Bancorp and Northern Trust Corporation are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that FITB's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.
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.
FITB currently has a forward P/E ratio of 12.20, while NTRS has a forward P/E of 15.27. We also note that FITB has a PEG ratio of 1.02. 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. NTRS currently has a PEG ratio of 1.23.
Another notable valuation metric for FITB is its P/B ratio of 1.64. 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, NTRS has a P/B of 2.46.
These are just a few of the metrics contributing to FITB's Value grade of B and NTRS's Value grade of F.
FITB stands above NTRS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FITB is the superior value option right now.
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Fifth Third Bancorp (FITB): Free Stock Analysis Report
Northern Trust Corporation (NTRS): Free Stock Analysis Report
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