Why Prosperity Bancshares (PB) is a Top Value Stock for the Long-Term

Zacks
01-31

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.

Prosperity Bancshares (PB)

Houston, TX-based Prosperity Bancshares, Inc. was formed in 1983 as a vehicle to acquire the former Allied Bank in Edna, TX, which was chartered in 1949 as The First National Bank of Edna and is presently known as Prosperity Bank. The financial holding company, pursuant to the Gramm-Leach-Bliley Act, derives substantially all of its revenues and income from its bank subsidiary — Prosperity Bank.

PB boasts a Value Style Score of B and VGM Score of B, and holds a Zacks Rank #3 (Hold) rating. Shares of Prosperity Bancshares are trading at a forward earnings multiple of 13.8X, as well as a PEG Ratio of 1.1, a Price/Cash Flow ratio of 14.7X, and a Price/Sales ratio of 4.3X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Two analysts revised their earnings estimate upwards in the last 60 days for fiscal 2025. The Zacks Consensus Estimate has increased $0.00 to $5.80 per share. PB has an average earnings surprise of 2.6%.

PB should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.

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