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 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 company value investors might notice is Fifth Third Bancorp (FITB). FITB is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 11.88, while its industry has an average P/E of 12.21. Over the past year, FITB's Forward P/E has been as high as 13.47 and as low as 8.99, with a median of 11.60.
Another notable valuation metric for FITB is its P/B ratio of 1.62. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.73. Over the past 12 months, FITB's P/B has been as high as 1.76 and as low as 1.22, with a median of 1.55.
Finally, our model also underscores that FITB has a P/CF ratio of 10.88. 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. FITB's P/CF compares to its industry's average P/CF of 13.19. Over the past 52 weeks, FITB's P/CF has been as high as 12.26 and as low as 8.01, with a median of 10.40.
Value investors will likely look at more than just these metrics, but the above data helps show that Fifth Third Bancorp is likely undervalued currently. And when considering the strength of its earnings outlook, FITB sticks out as one of the market's strongest value stocks.
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Fifth Third Bancorp (FITB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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