Is Prudential (PRU) a Great Value Stock Right Now?

·3 min read

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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 company to watch right now is Prudential (PRU). PRU is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 8.06 right now. For comparison, its industry sports an average P/E of 10.94. Over the last 12 months, PRU's Forward P/E has been as high as 8.62 and as low as 5.45, with a median of 6.60.

Investors will also notice that PRU has a PEG ratio of 0.76. 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. PRU's PEG compares to its industry's average PEG of 1.23. Over the last 12 months, PRU's PEG has been as high as 1.76 and as low as 0.61, with a median of 0.71.

Investors should also recognize that PRU has a P/B ratio of 0.71. 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 0.85. Over the past 12 months, PRU's P/B has been as high as 0.73 and as low as 0.34, with a median of 0.45.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. PRU has a P/S ratio of 0.74. This compares to its industry's average P/S of 1.21.

These are only a few of the key metrics included in Prudential'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, PRU looks like an impressive value stock at the moment.


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