Is Manulife Financial (MFC) Stock Undervalued Right Now?
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.
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 Manulife Financial (MFC). MFC is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.64. This compares to its industry's average Forward P/E of 7.60. Over the past 52 weeks, MFC's Forward P/E has been as high as 9.23 and as low as 3.88, with a median of 7.27.
We should also highlight that MFC has a P/B ratio of 0.78. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.32. MFC's P/B has been as high as 1.18 and as low as 0.50, with a median of 0.79, over the past year.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. MFC has a P/S ratio of 0.46. This compares to its industry's average P/S of 0.6.
Value investors will likely look at more than just these metrics, but the above data helps show that Manulife Financial is likely undervalued currently. And when considering the strength of its earnings outlook, MFC sticks out at as one of the market's strongest value stocks.
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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.