Investors looking for stocks in the Banks - Midwest sector might want to consider either Associated Banc-Corp (ASB) or Commerce Bancshares (CBSH). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, both Associated Banc-Corp and Commerce Bancshares are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

ASB currently has a forward P/E ratio of 9.19, while CBSH has a forward P/E of 15.83. We also note that ASB has a PEG ratio of 0.88. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CBSH currently has a PEG ratio of 2.04.

Another notable valuation metric for ASB is its P/B ratio of 0.77. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CBSH has a P/B of 2.39.

These metrics, and several others, help ASB earn a Value grade of B, while CBSH has been given a Value grade of C.

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

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Associated Banc-Corp (ASB) : Free Stock Analysis Report

Commerce Bancshares, Inc. (CBSH) : Free Stock Analysis Report

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

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