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.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Brighthouse Financial (BHF). BHF is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 4.36, while its industry has an average P/E of 10.13. BHF's Forward P/E has been as high as 5.83 and as low as 3.18, with a median of 4.60, all within the past year.
Investors will also notice that BHF has a PEG ratio of 0.38. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. BHF's industry has an average PEG of 0.98 right now. BHF's PEG has been as high as 0.51 and as low as 0.26, with a median of 0.41, all within 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. BHF has a P/S ratio of 0.52. This compares to its industry's average P/S of 0.93.
Finally, investors will want to recognize that BHF has a P/CF ratio of 7.67. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. BHF's current P/CF looks attractive when compared to its industry's average P/CF of 26.88. BHF's P/CF has been as high as 8.33 and as low as -33.40, with a median of -6.24, all within the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Brighthouse Financial is likely undervalued currently. And when considering the strength of its earnings outlook, BHF sticks out at as one of the market's strongest value stocks.
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Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report
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