NEW YORK (TheStreet) -- On Tuesday, Washington Federal (WAFD) - Get Report plans to report quarterly results, and investors should buy this stock.

Last week, Washington Federal stock crossed below its 200-day moving average of $21.57, and the stock now trades at about 13 times what the company earned per share over the past year. Shares are changing hands for less than $21, so they're 14% below their 52-week high at $24.53. Washington Federal's price-to-earnings ratio of 13 is now 2 points lower than the 15 P/E of the SPDR S&P Bank ETF (KBE) - Get Report , an exchange-traded fund that tracks an
index of bank stocks.

WAFD 6 Month Price Returns (Daily) data by YCharts

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What's more, fellow regional banksSusquehanna Bancshares (SUSQ) and MB Financial (MBFI) - Get Report have P/Es of 15 and 24, respectively, suggesting Washington Federal's shares are oversold. Plus, the highest 12-month price target from a Wall Street analyst is $27, suggesting there's plenty of room for this stock to gain ground.

Headquartered in Seattle, Washington Federal doesn't always get the recognition it deserves. The bank has consistently outperformed both Susquehanna and MB Financial in several key categories, including return on equity. Washington Federal's ROE of 8.02% is almost double that of MB Financial's (4.47%), and it's more than two percentage points higher than Susquehanna's (5.73%).

Washington Federal's ROE is also better than major banks Citigroup (C) - Get Report and Bank of America (BAC) - Get Report , which have ROEs of 4.53% and 2.22%, respectively. Return on equity is the metric that lets investors know how well companies are using their invested capital to return value to shareholders. And with Washington Federal paying a dividend yield of 2.9%, the bank's risk/reward ratio is on the positive side.

This article is commentary by an independent contributor. At the time of publication, the author held no position in the stocks mentioned.