Are Investors Undervaluing Dillard's (DDS) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Dillard's (DDS). DDS is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.
DDS is also sporting a PEG ratio of 1.18. 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. DDS's industry currently sports an average PEG of 1.45. Within the past year, DDS's PEG has been as high as 7.77 and as low as 1.04, with a median of 1.29.
We should also highlight that DDS has a P/B ratio of 1.08. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. DDS's current P/B looks attractive when compared to its industry's average P/B of 1.96. DDS's P/B has been as high as 1.65 and as low as 0.95, with a median of 1.27, over the past year.
Finally, investors should note that DDS has a P/CF ratio of 3.74. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 4.59. DDS's P/CF has been as high as 5.83 and as low as 3.28, with a median of 4.51, all within the past year.
These are just a handful of the figures considered in Dillard's's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DDS is an impressive value stock right now.
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