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Is Aflac (AFL) Stock Undervalued Right Now?

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Zacks Equity Research
·2 min read
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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Aflac (AFL). AFL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

Investors will also notice that AFL has a PEG ratio of 1.80. 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. AFL's industry has an average PEG of 2.14 right now. Over the past 52 weeks, AFL's PEG has been as high as 3.48 and as low as 1.42, with a median of 1.81.

Finally, we should also recognize that AFL has a P/CF ratio of 5.33. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.73. Within the past 12 months, AFL's P/CF has been as high as 9.13 and as low as 4.06, with a median of 6.24.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Aflac is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AFL feels like a great value stock at the moment.


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