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Are Investors Undervaluing Exelon (EXC) Right Now?

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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, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One company value investors might notice is Exelon (EXC - Free Report) . EXC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Investors should also recognize that EXC has a P/B ratio of 1.36. 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 solid versus its industry's average P/B of 1.75. EXC's P/B has been as high as 1.36 and as low as 1.08, with a median of 1.23, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. EXC has a P/S ratio of 1.28. This compares to its industry's average P/S of 1.86.

Finally, our model also underscores that EXC has a P/CF ratio of 4.42. 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. EXC's current P/CF looks attractive when compared to its industry's average P/CF of 6.88. Within the past 12 months, EXC's P/CF has been as high as 5.07 and as low as 3.56, with a median of 4.13.

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


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