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Should Value Investors Buy BT Group (BT) Stock?

Zacks Equity Research
Adobe Systems (ADBE) closed at $306.87 in the latest trading session, marking a -1.04% move from the prior day.

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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 BT Group (BT). BT is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 8.77, while its industry has an average P/E of 12.64. Over the past year, BT's Forward P/E has been as high as 10.26 and as low as 7.36, with a median of 8.74.

Finally, investors should note that BT has a P/CF ratio of 3.98. 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. BT's P/CF compares to its industry's average P/CF of 9.53. Over the past year, BT's P/CF has been as high as 4.90 and as low as 3.65, with a median of 4.12.

These are just a handful of the figures considered in BT Group'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 BT is an impressive value stock right now.


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