MTB or NTRS: Which Is the Better Value Stock Right Now?

Investors looking for stocks in the Banks - Major Regional sector might want to consider either M&T Bank Corporation (MTB) or 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.

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.

Currently, both M&T Bank Corporation and Northern Trust Corporation are holding a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

MTB currently has a forward P/E ratio of 12.70, while NTRS has a forward P/E of 15.75. We also note that MTB has a PEG ratio of 1.17. 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 1.20.

Another notable valuation metric for MTB is its P/B ratio of 1.39. 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, NTRS has a P/B of 2.7.

Based on these metrics and many more, MTB holds a Value grade of B, while NTRS has a Value grade of D.

Both MTB and NTRS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MTB is the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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