Is Invesco Mortgage Capital (IVR) Stock Undervalued Right Now?

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 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.

Invesco Mortgage Capital (IVR) is a stock many investors are watching right now. IVR is currently holding a Zacks Rank #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 3.7. This compares to its industry's average Forward P/E of 8.14. Over the past year, IVR's Forward P/E has been as high as 4.12 and as low as 2.63, with a median of 3.41.

Another valuation metric that we should highlight is IVR's P/B ratio of 0.9. The P/B is a method of comparing a stock's market value to 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 1.01. Over the past 12 months, IVR's P/B has been as high as 0.99 and as low as 0.70, with a median of 0.88.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Invesco Mortgage Capital is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, IVR feels like a great value stock at the moment.

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

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