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Is Popular (BPOP) a Great Value Stock Right Now?

Zacks Equity Research

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 stock to keep an eye on is Popular (BPOP). BPOP is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 7.59, while its industry has an average P/E of 10.61. Over the last 12 months, BPOP's Forward P/E has been as high as 9.74 and as low as 7.27, with a median of 8.60.

Investors should also recognize that BPOP has a P/B ratio of 0.90. The P/B is a method of comparing a stock's market value to 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 1.46. Over the past year, BPOP's P/B has been as high as 1.11 and as low as 0.86, with a median of 0.98.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. BPOP has a P/S ratio of 1.87. This compares to its industry's average P/S of 2.74.

Finally, our model also underscores that BPOP has a P/CF ratio of 10.26. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 10.97. Over the past year, BPOP's P/CF has been as high as 16.54 and as low as 7.96, with a median of 9.88.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Popular is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BPOP feels like a great value stock at the moment.


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