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, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 value investors might notice is Citizens Financial Group (CFG). CFG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
Another notable valuation metric for CFG is its P/B ratio of 0.57. 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 stock’s P/B looks solid versus its industry’s average P/B of 0.65. Over the past 12 months, CFG’s P/B has been as high as 0.86 and as low as 0.32, with a median of 0.56.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock’s price with the company’s sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. CFG has a P/S ratio of 1.46. This compares to its industry’s average P/S of 1.93.
Finally, investors should note that CFG has a P/CF ratio of 6.32. This data point considers a firm’s operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock’s P/CF looks attractive against its industry’s average P/CF of 8.23. Within the past 12 months, CFG’s P/CF has been as high as 7.66 and as low as 2.76, with a median of 5.95.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Citizens Financial Group is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CFG feels like a great value stock at the moment.
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