U.S. Markets close in 1 hr 21 mins

Is British American Tobacco (BTI) a Great Value Stock Right Now?

Zacks Equity Research
Dividends are one of the best benefits to being a shareholder, but finding a great dividend stock is no easy task. Does Regions Financial (RF) have what it takes? Let's find out.

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

British American Tobacco (BTI) is a stock many investors are watching right now. BTI is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 9.16, while its industry has an average P/E of 12.95. BTI's Forward P/E has been as high as 13.64 and as low as 7.81, with a median of 11.77, all within the past year.

We also note that BTI holds a PEG ratio of 0.96. 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. BTI's PEG compares to its industry's average PEG of 1.65. Over the past 52 weeks, BTI's PEG has been as high as 1.70 and as low as 0.82, with a median of 1.50.

These are only a few of the key metrics included in British American Tobacco's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, BTI looks like an impressive value stock at the moment.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
British American Tobacco p.l.c. (BTI) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research