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Is Johnson Controls (JCI) a Great Value Stock Right Now?

Zacks Equity Research
The Hartford (HIG) is at a 52-week high, but can investors hope for more gains in the future? We take a look at the company's fundamentals for clues.

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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Johnson Controls (JCI) is a stock many investors are watching right now. JCI is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another valuation metric that we should highlight is JCI's P/B ratio of 1.69. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.93. JCI's P/B has been as high as 1.70 and as low as 1.17, with a median of 1.49, over the past year.

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. JCI has a P/S ratio of 1.3. This compares to its industry's average P/S of 1.6.

Value investors will likely look at more than just these metrics, but the above data helps show that Johnson Controls is likely undervalued currently. And when considering the strength of its earnings outlook, JCI sticks out at as one of the market's strongest value stocks.


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