Is MetLife (MET) a Great Value Stock Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader 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.
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 stock to keep an eye on is MetLife (MET). MET is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 7.77 right now. For comparison, its industry sports an average P/E of 8.62. Over the last 12 months, MET's Forward P/E has been as high as 8.99 and as low as 6.84, with a median of 8.06.
Investors will also notice that MET has a PEG ratio of 0.93. 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 has an average PEG of 0.96 right now. Within the past year, MET's PEG has been as high as 1.05 and as low as 0.54, with a median of 0.91.
Another notable valuation metric for MET is its P/B ratio of 0.69. 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. MET's current P/B looks attractive when compared to its industry's average P/B of 1.48. Over the past 12 months, MET's P/B has been as high as 0.92 and as low as 0.65, with a median of 0.79.
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 popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MET has a P/S ratio of 0.66. This compares to its industry's average P/S of 1.04.
These are just a handful of the figures considered in MetLife'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 MET is an impressive value stock right now.
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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.