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Is Raymond James (RJF) a Great Value Stock Right Now?

Zacks Equity Research

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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.

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.

Raymond James (RJF) is a stock many investors are watching right now. RJF is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A.

Investors should also note that RJF holds a PEG ratio of 0.66. 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. RJF's PEG compares to its industry's average PEG of 0.84. Over the last 12 months, RJF's PEG has been as high as 0.84 and as low as 0.54, with a median of 0.66.

Another valuation metric that we should highlight is RJF's P/B ratio of 1.90. 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 stock's P/B looks solid versus its industry's average P/B of 1.96. Within the past 52 weeks, RJF's P/B has been as high as 2.43 and as low as 1.58, with a median of 1.91.

Finally, investors should note that RJF has a P/CF ratio of 10.92. 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. RJF's current P/CF looks attractive when compared to its industry's average P/CF of 19.08. Within the past 12 months, RJF's P/CF has been as high as 18.47 and as low as 9.47, with a median of 11.73.

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


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