TCBI vs. CFR: Which Stock Is the Better Value Option?

Core Viewpoint - Investors in the Banks - Southwest sector should consider Texas Capital (TCBI) and Cullen/Frost Bankers (CFR) for potential value opportunities [1] Group 1: Zacks Rank and Earnings Outlook - Texas Capital has a Zacks Rank of 1 (Strong Buy), while Cullen/Frost Bankers has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook for TCBI [3] - The Zacks Rank system emphasizes companies with positive earnings estimate revisions, suggesting TCBI is likely experiencing a more favorable earnings outlook [3] Group 2: Valuation Metrics - TCBI has a forward P/E ratio of 13.53, compared to CFR's forward P/E of 14.37, indicating TCBI may be undervalued [5] - TCBI's PEG ratio is 0.50, while CFR's PEG ratio is significantly higher at 5.38, suggesting TCBI offers better value relative to its expected earnings growth [5] - TCBI's P/B ratio is 1.41, compared to CFR's P/B of 2.11, further supporting TCBI's valuation attractiveness [6] Group 3: Value Grades - TCBI has earned a Value grade of B, while CFR has a Value grade of C, indicating TCBI is viewed more favorably by value investors [6] - Stronger estimate revision activity and more attractive valuation metrics position TCBI as the superior option for value investors [7]