Is Principal Financial (PFG) a Great Value Stock 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is Principal Financial (PFG). PFG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 6.74. This compares to its industry's average Forward P/E of 12.35. Over the past year, PFG's Forward P/E has been as high as 9.99 and as low as 4.10, with a median of 7.63.
We also note that PFG holds a PEG ratio of 1.03. 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. PFG's PEG compares to its industry's average PEG of 1.66. Over the past 52 weeks, PFG's PEG has been as high as 3.49 and as low as 0.49, with a median of 1.37.
Another notable valuation metric for PFG is its P/B ratio of 0.74. 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 1.96. Within the past 52 weeks, PFG's P/B has been as high as 1.08 and as low as 0.46, with a median of 0.81.
Value investors will likely look at more than just these metrics, but the above data helps show that Principal Financial is likely undervalued currently. And when considering the strength of its earnings outlook, PFG sticks out at as one of the market's strongest value stocks.
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