In This Article:
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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 PG&E (PCG). PCG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 12.88. This compares to its industry's average Forward P/E of 15.01. Over the past 52 weeks, PCG's Forward P/E has been as high as 14.79 and as low as 11.62, with a median of 12.93.
Investors should also note that PCG holds a PEG ratio of 1.34. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PCG's PEG compares to its industry's average PEG of 1.89. PCG's PEG has been as high as 5.35 and as low as 1.34, with a median of 1.50, all within the past year.
Another valuation metric that we should highlight is PCG's P/B ratio of 1.86. The P/B ratio pits a stock's market value against 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 2.38. Over the past 12 months, PCG's P/B has been as high as 2.10 and as low as 1.66, with a median of 1.90.
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. PCG has a P/S ratio of 1.81. This compares to its industry's average P/S of 2.1.
Finally, we should also recognize that PCG has a P/CF ratio of 6.11. 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 11.45. Over the past year, PCG's P/CF has been as high as 7.04 and as low as 5.62, with a median of 6.25.