Is Principal Financial Group (PFG) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 value investors might notice is Principal Financial Group (PFG). PFG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 11.74 right now. For comparison, its industry sports an average P/E of 13.91. Over the last 12 months, PFG's Forward P/E has been as high as 13.67 and as low as 9.44, with a median of 11.14.
We should also highlight that PFG has a P/B ratio of 1.98. 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. PFG's current P/B looks attractive when compared to its industry's average P/B of 2.95. PFG's P/B has been as high as 2.45 and as low as 1.46, with a median of 1.81, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. PFG has a P/S ratio of 1.18. This compares to its industry's average P/S of 2.78.
Investors could also keep in mind Victory Capital Holdings (VCTR), an Financial - Investment Management stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Victory Capital Holdings currently holds a Forward P/E ratio of 6.94, and its PEG ratio is 1.09. In comparison, its industry sports average P/E and PEG ratios of 13.91 and 0.97.
VCTR's Forward P/E has been as high as 7.42 and as low as 4.94, with a median of 6.37. During the same time period, its PEG ratio has been as high as 2.87, as low as 0.88, with a median of 2.32.
Victory Capital Holdings sports a P/B ratio of 2.17 as well; this compares to its industry's price-to-book ratio of 2.95. In the past 52 weeks, VCTR's P/B has been as high as 2.21, as low as 1.50, with a median of 1.88.
Value investors will likely look at more than just these metrics, but the above data helps show that Principal Financial Group and Victory Capital Holdings are likely undervalued currently. And when considering the strength of its earnings outlook, PFG and VCTR sticks out as one of the market's strongest value stocks.
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Principal Financial Group, Inc. (PFG) : Free Stock Analysis Report
Victory Capital Holdings, Inc. (VCTR) : Free Stock Analysis Report
