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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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.
Aegon (AEG) is a stock many investors are watching right now. AEG is currently sporting a Zacks Rank #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.51, which compares to its industry's average of 8.86. Over the last 12 months, AEG's Forward P/E has been as high as 12.62 and as low as 5.36, with a median of 6.58.
Investors should also note that AEG holds a PEG ratio of 0.25. 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. AEG's PEG compares to its industry's average PEG of 0.47. Over the past 52 weeks, AEG's PEG has been as high as 0.29 and as low as 0.18, with a median of 0.25.
We should also highlight that AEG has a P/B ratio of 1.47. 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 2.60. Within the past 52 weeks, AEG's P/B has been as high as 1.59 and as low as 1.10, with a median of 1.37.
Investors could also keep in mind Allianz (ALIZY), another Insurance - Multi line stock with a Zacks Rank of #2 (Buy) and Value grade of A.
Shares of Allianz are currently trading at a forward earnings multiple of 11.86 and a PEG ratio of 1.14 compared to its industry's P/E and PEG ratios of 8.86 and 0.47, respectively.
ALIZY's price-to-earnings ratio has been as high as 12.99 and as low as 10.14, with a median of 11.72, while its PEG ratio has been as high as 1.37 and as low as 1.06, with a median of 1.16, all within the past year.
Additionally, Allianz has a P/B ratio of 2.30 while its industry's price-to-book ratio sits at 2.60. For ALIZY, this valuation metric has been as high as 2.48, as low as 1.67, with a median of 2.10 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Aegon and Allianz are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, AEG and ALIZY feels like a great value stock at the moment.
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Aegon NV (AEG): Free Stock Analysis Report Allianz SE (ALIZY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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