Are Investors Undervaluing Heartland Financial USA (HTLF) Right Now?
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.
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 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.
One company to watch right now is Heartland Financial USA (HTLF). HTLF is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.36 right now. For comparison, its industry sports an average P/E of 10.96. Over the last 12 months, HTLF's Forward P/E has been as high as 9.49 and as low as 5.51, with a median of 6.97.
We should also highlight that HTLF has a P/B ratio of 0.95. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.96. HTLF's P/B has been as high as 1.33 and as low as 0.66, with a median of 0.78, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HTLF has a P/S ratio of 1.77. This compares to its industry's average P/S of 1.89.
Finally, our model also underscores that HTLF has a P/CF ratio of 6.22. 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 13.65. Over the past 52 weeks, HTLF's P/CF has been as high as 7.35 and as low as 3.90, with a median of 4.94.
Value investors will likely look at more than just these metrics, but the above data helps show that Heartland Financial USA is likely undervalued currently. And when considering the strength of its earnings outlook, HTLF sticks out at as one of the market's strongest value stocks.
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Heartland Financial USA, Inc. (HTLF) : Free Stock Analysis Report
