Should Value Investors Buy Manulife Financial (MFC) Stock?
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.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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 stock to keep an eye on is Manulife Financial (MFC). MFC 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 7.82 right now. For comparison, its industry sports an average P/E of 9.97. MFC's Forward P/E has been as high as 9.32 and as low as 6.16, with a median of 8.27, all within the past year.
MFC is also sporting a PEG ratio of 0.78. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. MFC's industry has an average PEG of 0.97 right now. Within the past year, MFC's PEG has been as high as 0.98 and as low as 0.62, with a median of 0.83.
Another valuation metric that we should highlight is MFC's P/B ratio of 1.03. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.99. Over the past 12 months, MFC's P/B has been as high as 1.24 and as low as 0.84, with a median of 1.09.
Finally, investors will want to recognize that MFC has a P/CF ratio of 7.96. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. MFC's P/CF compares to its industry's average P/CF of 26.67. Over the past 52 weeks, MFC's P/CF has been as high as 14.68 and as low as 6.48, with a median of 9.34.
These are only a few of the key metrics included in Manulife Financial's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MFC looks like an impressive value stock at the moment.
Click to get this free report
Manulife Financial Corp (MFC): Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.