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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 Citizens Financial Group (CFG). CFG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
We should also highlight that CFG has a P/B ratio of 0.57. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 0.65. Over the past year, CFG's P/B has been as high as 0.86 and as low as 0.32, with a median of 0.57.
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 1.46. This compares to its industry's average P/S of 1.91.
Finally, investors will want to recognize that CFG has a P/CF ratio of 6.32. 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. CFG's current P/CF looks attractive when compared to its industry's average P/CF of 8.23. Within the past 12 months, CFG's P/CF has been as high as 7.66 and as low as 2.76, with a median of 6.07.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Citizens Financial Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CFG feels like a great value stock at the moment.
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