Are Investors Undervaluing Bank OZK (OZK) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Bank OZK (OZK). OZK is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.53, which compares to its industry's average of 10.35. Over the last 12 months, OZK's Forward P/E has been as high as 13.29 and as low as 6.23, with a median of 10.10.
Investors will also notice that OZK has a PEG ratio of 0.71. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. OZK's PEG compares to its industry's average PEG of 1.08. OZK's PEG has been as high as 1.11 and as low as 0.52, with a median of 0.86, all within the past year.
We should also highlight that OZK has a P/B ratio of 1.01. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. OZK's current P/B looks attractive when compared to its industry's average P/B of 1.44. Within the past 52 weeks, OZK's P/B has been as high as 1.89 and as low as 0.74, with a median of 1.39.
Finally, we should also recognize that OZK has a P/CF ratio of 8.07. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. OZK's current P/CF looks attractive when compared to its industry's average P/CF of 12.85. Over the past 52 weeks, OZK's P/CF has been as high as 13.87 and as low as 5.39, with a median of 9.70.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Bank OZK is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, OZK feels like a great value stock at the moment.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.