Are Investors Undervaluing Deluxe (DLX) Right Now?

DLX

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.

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.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Deluxe (DLX - Free Report) . DLX is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 6.05, while its industry has an average P/E of 9.87. Over the past 52 weeks, DLX's Forward P/E has been as high as 9.57 and as low as 6.04, with a median of 8.31.

Another notable valuation metric for DLX is its P/B ratio of 1.91. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. DLX's current P/B looks attractive when compared to its industry's average P/B of 2.83. Within the past 52 weeks, DLX's P/B has been as high as 3.20 and as low as 1.79, with a median of 2.44.

Finally, our model also underscores that DLX has a P/CF ratio of 6.02. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 10.25. Over the past year, DLX's P/CF has been as high as 9.50 and as low as 5.70, with a median of 7.49.

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

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