Is Principal Financial (PFG) 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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is Principal Financial (PFG). PFG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 7.37 right now. For comparison, its industry sports an average P/E of 12.56. PFG's Forward P/E has been as high as 9.99 and as low as 4.10, with a median of 8.62, all within the past year.
PFG is also sporting a PEG ratio of 1.12. 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. PFG's industry has an average PEG of 1.68 right now. PFG's PEG has been as high as 3.49 and as low as 0.49, with a median of 1.38, all within the past year.
We should also highlight that PFG has a P/B ratio of 0.78. 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. This company's current P/B looks solid when compared to its industry's average P/B of 1.96. Within the past 52 weeks, PFG's P/B has been as high as 1.14 and as low as 0.46, with a median of 0.98.
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. PFG has a P/S ratio of 0.75. This compares to its industry's average P/S of 1.93.
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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