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.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is Brighthouse Financial (BHF). BHF is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 4.48. This compares to its industry's average Forward P/E of 10.38. BHF's Forward P/E has been as high as 5.83 and as low as 3.18, with a median of 4.56, all within the past year.
We also note that BHF holds a PEG ratio of 0.39. 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. BHF's PEG compares to its industry's average PEG of 1.01. Within the past year, BHF's PEG has been as high as 0.51 and as low as 0.26, with a median of 0.40.
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. BHF has a P/S ratio of 0.54. This compares to its industry's average P/S of 0.96.
Finally, investors will want to recognize that BHF has a P/CF ratio of 8.01. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 27.69. Over the past year, BHF's P/CF has been as high as 8.33 and as low as -33.40, with a median of -6.02.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Brighthouse Financial is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BHF feels like a great value stock at the moment.
Brighthouse Financial, Inc. (BHF): Free Stock Analysis Report
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