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Are Investors Undervaluing Heartland Financial (HTLF) Right Now?

Zacks Equity Research
·3 mins read

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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 stock to keep an eye on is Heartland Financial (HTLF). HTLF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.70, which compares to its industry's average of 12.84. Over the past year, HTLF's Forward P/E has been as high as 12.86 and as low as 8.43, with a median of 11.19.

HTLF is also sporting a PEG ratio of 1.07. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HTLF's PEG compares to its industry's average PEG of 2.76. Within the past year, HTLF's PEG has been as high as 1.23 and as low as 1, with a median of 1.10.

We should also highlight that HTLF has a P/B ratio of 0.84. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.26. Within the past 52 weeks, HTLF's P/B has been as high as 1.22 and as low as 0.81, with a median of 1.11.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. HTLF has a P/S ratio of 1.96. This compares to its industry's average P/S of 2.21.

Finally, our model also underscores that HTLF has a P/CF ratio of 6.63. 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. HTLF's current P/CF looks attractive when compared to its industry's average P/CF of 13.84. Over the past 52 weeks, HTLF's P/CF has been as high as 9.48 and as low as 6.42, with a median of 8.51.

These are just a handful of the figures considered in Heartland Financial'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 HTLF is an impressive value stock right now.


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