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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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.
One company to watch right now is MetLife (MET). MET is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 8.11. This compares to its industry's average Forward P/E of 10.40. Over the past 52 weeks, MET's Forward P/E has been as high as 9.33 and as low as 7.33, with a median of 8.13.
Investors should also note that MET holds a PEG ratio of 0.92. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MET's PEG compares to its industry's average PEG of 1.16. Within the past year, MET's PEG has been as high as 1.09 and as low as 0.58, with a median of 0.96.
Another notable valuation metric for MET is its P/B ratio of 0.67. 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 1.37. Over the past year, MET's P/B has been as high as 0.85 and as low as 0.60, with a median of 0.71.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MET has a P/S ratio of 0.68. This compares to its industry's average P/S of 1.06.
Value investors will likely look at more than just these metrics, but the above data helps show that MetLife is likely undervalued currently. And when considering the strength of its earnings outlook, MET sticks out at as one of the market's strongest value stocks.
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