Is United Technologies (UTX) a Great Value Stock Right Now?
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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 United Technologies (UTX). UTX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 16.02 right now. For comparison, its industry sports an average P/E of 18.63. UTX's Forward P/E has been as high as 18.48 and as low as 13.25, with a median of 15.97, all within the past year.
UTX is also sporting a PEG ratio of 1.82. 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. UTX's industry has an average PEG of 2.35 right now. Within the past year, UTX's PEG has been as high as 2.03 and as low as 1.45, with a median of 1.81.
Investors should also recognize that UTX has a P/B ratio of 2.76. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. UTX's current P/B looks attractive when compared to its industry's average P/B of 6.49. UTX's P/B has been as high as 3.41 and as low as 2.04, with a median of 2.75, over the past year.
These are just a handful of the figures considered in United Technologies's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that UTX is an impressive value stock right now.
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