Is American Financial Group (AFG) a Great Value Stock Right Now?
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 use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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.
American Financial Group (AFG) is a stock many investors are watching right now. AFG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.36 right now. For comparison, its industry sports an average P/E of 21.87. Over the past year, AFG's Forward P/E has been as high as 12.92 and as low as 5.20, with a median of 8.60.
We also note that AFG holds a PEG ratio of 1.37. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AFG's PEG compares to its industry's average PEG of 3.02. AFG's PEG has been as high as 2.37 and as low as 0.80, with a median of 2.24, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that American Financial Group is likely undervalued currently. And when considering the strength of its earnings outlook, AFG sticks out at as one of the market's strongest value stocks.
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