Investors looking for stocks in the Banks - Southwest sector might want to consider either Texas Capital $(TCBI)$ or Cullen/Frost Bankers $(CFR)$. But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.

Texas Capital has a Zacks Rank of #2 (Buy), while Cullen/Frost Bankers has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that TCBI likely has seen a stronger improvement to its earnings outlook than CFR has recently. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

TCBI currently has a forward P/E ratio of 10.71, while CFR has a forward P/E of 12.07. We also note that TCBI has a PEG ratio of 0.72. 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. CFR currently has a PEG ratio of 4.25.

Another notable valuation metric for TCBI is its P/B ratio of 0.92. 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, CFR has a P/B of 1.83.

These are just a few of the metrics contributing to TCBI's Value grade of A and CFR's Value grade of F.

TCBI sticks out from CFR in both our Zacks Rank and Style Scores models, so value investors will likely feel that TCBI is the better option right now.

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Texas Capital Bancshares, Inc. (TCBI) : Free Stock Analysis Report

Cullen/Frost Bankers, Inc. (CFR) : Free Stock Analysis Report

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

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