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, 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.
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 to watch right now is Dentsply Sirona (XRAY). XRAY is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 8.04 right now. For comparison, its industry sports an average P/E of 16.56. XRAY's Forward P/E has been as high as 12.54 and as low as 6.77, with a median of 9.69, all within the past year.
We also note that XRAY holds a PEG ratio of 1.09. 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. XRAY's PEG compares to its industry's average PEG of 1.74. XRAY's PEG has been as high as 1.91 and as low as 0.84, with a median of 1.11, all within the past year.
Another valuation metric that we should highlight is XRAY's P/B ratio of 1.57. 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 4.55. XRAY's P/B has been as high as 2.16 and as low as 1.24, with a median of 1.64, over the past year.
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. XRAY has a P/S ratio of 0.85. This compares to its industry's average P/S of 1.16.
Finally, investors will want to recognize that XRAY has a P/CF ratio of 15.26. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. XRAY's P/CF compares to its industry's average P/CF of 17.40. XRAY's P/CF has been as high as 19.05 and as low as 7.83, with a median of 12.78, all within the past year.
These are only a few of the key metrics included in Dentsply Sirona'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, XRAY looks like an impressive value stock at the moment.
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DENTSPLY SIRONA Inc. (XRAY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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