Should Value Investors Buy Aegon (AEG) Stock?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
Aegon (AEG) is a stock many investors are watching right now. AEG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 6.62, which compares to its industry's average of 7.80. Over the last 12 months, AEG's Forward P/E has been as high as 115.70 and as low as 5.77, with a median of 10.66.
Another notable valuation metric for AEG is its P/B ratio of 1.17. The P/B ratio pits a stock's market value against 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 2.39. Over the past 12 months, AEG's P/B has been as high as 1.31 and as low as 0.65, with a median of 0.88.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AEG has a P/S ratio of 0.65. This compares to its industry's average P/S of 0.74.
Another great Insurance - Multi line stock you could consider is Old Republic International (ORI), which is a # 2 (Buy) stock with a Value Score of A.
Furthermore, Old Republic International holds a P/B ratio of 1.24 and its industry's price-to-book ratio is 2.39. ORI's P/B has been as high as 1.32, as low as 1.12, with a median of 1.24 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that Aegon and Old Republic International are likely undervalued currently. And when considering the strength of its earnings outlook, AEG and ORI sticks out as one of the market's strongest value stocks.
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Aegon NV (AEG) : Free Stock Analysis Report
Old Republic International Corporation (ORI) : Free Stock Analysis Report
