Should Value Investors Buy Manulife Financial Corp (MFC) Stock?

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, 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 stock to keep an eye on is Manulife Financial Corp (MFC). MFC is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.

Investors should also recognize that MFC has a P/B ratio of 1.61. Investors use the P/B ratio to look at a stock's market value versus 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 1.91. Within the past 52 weeks, MFC's P/B has been as high as 1.75 and as low as 1.33, with a median of 1.58.

Finally, we should also recognize that MFC has a P/CF ratio of 15.35. 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. MFC's P/CF compares to its industry's average P/CF of 17.76. Over the past year, MFC's P/CF has been as high as 16.32 and as low as 11.85, with a median of 13.17.

These are only a few of the key metrics included in Manulife Financial Corp'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.

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This article originally published on Zacks Investment Research (zacks.com).

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