Should Value Investors Buy Invesco (IVZ) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
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 Invesco (IVZ). IVZ is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 5.61, which compares to its industry's average of 13.23. Over the past year, IVZ's Forward P/E has been as high as 9.14 and as low as 5.61, with a median of 6.72.
Investors should also note that IVZ holds a PEG ratio of 0.71. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. IVZ's PEG compares to its industry's average PEG of 1.36. Over the last 12 months, IVZ's PEG has been as high as 1.16 and as low as 0.69, with a median of 0.85.
We should also highlight that IVZ has a P/B ratio of 0.71. 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 stock's P/B looks attractive against its industry's average P/B of 1.84. Over the past year, IVZ's P/B has been as high as 0.98 and as low as 0.69, with a median of 0.82.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. IVZ has a P/S ratio of 1.08. This compares to its industry's average P/S of 2.49.
Finally, investors will want to recognize that IVZ has a P/CF ratio of 8.33. 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. This stock's P/CF looks attractive against its industry's average P/CF of 17.67. IVZ's P/CF has been as high as 12.06 and as low as 7.46, with a median of 9.62, all within the past year.
These are just a handful of the figures considered in Invesco's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that IVZ is an impressive value stock right now.
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