Should Value Investors Buy MetLife (MET) Stock?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.
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.
One company to watch right now is MetLife (MET). MET is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 7.08. This compares to its industry's average Forward P/E of 7.79. Over the last 12 months, MET's Forward P/E has been as high as 10.27 and as low as 5.86, with a median of 7.36.
MET is also sporting a PEG ratio of 0.54. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. MET's industry currently sports an average PEG of 0.67. Within the past year, MET's PEG has been as high as 5.74 and as low as 0.22, with a median of 0.59.
Another notable valuation metric for MET is its P/B ratio of 1.58. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.37. Over the past year, MET's P/B has been as high as 2.47 and as low as 1.16, with a median of 1.61.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MET has a P/S ratio of 0.66. This compares to its industry's average P/S of 0.72.
Investors could also keep in mind MGIC Investment (MTG), an Insurance - Multi line stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of MGIC Investment currently holds a Forward P/E ratio of 7.05, and its PEG ratio is 1.41. In comparison, its industry sports average P/E and PEG ratios of 7.79 and 0.67.
MTG's price-to-earnings ratio has been as high as 7.70 and as low as 4.53, with a median of 6.29, while its PEG ratio has been as high as 1.54 and as low as 0.91, with a median of 1.26, all within the past year.
Furthermore, MGIC Investment holds a P/B ratio of 0.97 and its industry's price-to-book ratio is 2.37. MTG's P/B has been as high as 1.05, as low as 0.79, with a median of 0.89 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that MetLife and MGIC Investment are likely undervalued currently. And when considering the strength of its earnings outlook, MET and MTG sticks out as one of the market's strongest value stocks.
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MetLife, Inc. (MET) : Free Stock Analysis Report
MGIC Investment Corporation (MTG) : Free Stock Analysis Report
