Are Investors Undervaluing Citizens Financial Group (CFG) 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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company to watch right now is Citizens Financial Group (CFG). CFG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 8.79, which compares to its industry's average of 11.27. CFG's Forward P/E has been as high as 11.54 and as low as 7.26, with a median of 9.30, all within the past year.
CFG is also sporting a PEG ratio of 1.09. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CFG's industry has an average PEG of 1.42 right now. CFG's PEG has been as high as 1.15 and as low as 0.46, with a median of 0.55, all within the past year.
Another valuation metric that we should highlight is CFG's P/B ratio of 0.80. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. CFG's current P/B looks attractive when compared to its industry's average P/B of 0.95. Over the past year, CFG's P/B has been as high as 1.03 and as low as 0.67, with a median of 0.85.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CFG has a P/S ratio of 2.08. This compares to its industry's average P/S of 2.91.
Finally, investors will want to recognize that CFG has a P/CF ratio of 7.18. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.79. Within the past 12 months, CFG's P/CF has been as high as 9.30 and as low as 5.57, with a median of 7.41.
These are just a handful of the figures considered in Citizens Financial 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 CFG is an impressive value stock right now.
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