Are Investors Undervaluing Manulife Financial (MFC) 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 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 Manulife Financial (MFC). MFC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.40 right now. For comparison, its industry sports an average P/E of 7.90. MFC's Forward P/E has been as high as 9.23 and as low as 3.88, with a median of 7.58, all within the past year.
Investors should also note that MFC holds a PEG ratio of 0.74. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MFC's PEG compares to its industry's average PEG of 0.81. Over the last 12 months, MFC's PEG has been as high as 3.06 and as low as 0.39, with a median of 0.79.
Another valuation metric that we should highlight is MFC's P/B ratio of 0.70. 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. MFC's current P/B looks attractive when compared to its industry's average P/B of 1.32. Over the past 12 months, MFC's P/B has been as high as 1.18 and as low as 0.50, with a median of 0.97.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MFC has a P/S ratio of 0.48. This compares to its industry's average P/S of 0.66.
Finally, investors should note that MFC has a P/CF ratio of 8.77. 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. MFC's current P/CF looks attractive when compared to its industry's average P/CF of 10.84. Over the past 52 weeks, MFC's P/CF has been as high as 17.30 and as low as 4.23, with a median of 8.40.
These are just a handful of the figures considered in Manulife 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 MFC is an impressive value stock right now.
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