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Should Value Investors Pick Diebold Nixdorf (DBD) Stock Now?
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Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Diebold Nixdorf, Incorporated (DBD - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Diebold Nixdorf has a trailing twelve months PE ratio of 17.18, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 24.14. If we focus on the long-term PE trend, Diebold Nixdorf’s current PE level puts it above its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the sector’s trailing twelve months PE ratio, which stands at 33.42. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Diebold Nixdorf has a forward PE ratio (price relative to this year’s earnings) of just 9.11, so it is fair to say that a slightly more value-oriented path may be ahead for Diebold Nixdorf stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Diebold Nixdorf has a P/S ratio of about 0.15. This is significantly lower than the S&P 500 average, which comes in at 4.27 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, DBD is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Diebold Nixdorf currently has a Zacks Value Style Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Diebold Nixdorf a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, its P/CF ratio (another great indicator of value) comes in at 2.84, which is far better than the industry average of 14.65. Clearly, DBD is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Diebold Nixdorf might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of A and a Momentum score of C. This gives DBD a Zacks VGM score—or its overarching fundamental grade—of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been encouraging. The current quarter as well as the full year has seen two estimates go higher in the past sixty days compared to none lower.
As a result, the current quarter consensus estimate has risen by 55% in the past two months, while the full year estimate has increased significantly. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Even though Diebold Nixdorf has a better estimates trend, the stock has just a Zacks Rank #3 (Hold). That is why we are looking for in-line performance from the company in the near term.
Bottom Line
Diebold Nixdorf is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. With a solid industry rank (among the Top 31%), Diebold Nixdorf looks like a strong value contender. In fact, over the past two years, the industry has clearly outperformed the broader market, as you can see below:
So, despite a Zacks Rank #3, we believe that bullish analyst sentiment and favorable industry factors make this value stock a compelling pick.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Image: Bigstock
Should Value Investors Pick Diebold Nixdorf (DBD) Stock Now?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Diebold Nixdorf, Incorporated (DBD - Free Report) stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Diebold Nixdorf has a trailing twelve months PE ratio of 17.18, as you can see in the chart below:
This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 stands at about 24.14. If we focus on the long-term PE trend, Diebold Nixdorf’s current PE level puts it above its midpoint over the past five years.
Further, the stock’s PE also compares favorably with the sector’s trailing twelve months PE ratio, which stands at 33.42. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.
We should also point out that Diebold Nixdorf has a forward PE ratio (price relative to this year’s earnings) of just 9.11, so it is fair to say that a slightly more value-oriented path may be ahead for Diebold Nixdorf stock in the near term too.
P/S Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Diebold Nixdorf has a P/S ratio of about 0.15. This is significantly lower than the S&P 500 average, which comes in at 4.27 right now. Also, as we can see in the chart below, this is well below the highs for this stock in particular over the past few years.
If anything, DBD is in the lower end of its range in the time period from a P/S metric, suggesting some level of undervalued trading—at least compared to historical norms.
Broad Value Outlook
In aggregate, Diebold Nixdorf currently has a Zacks Value Style Score of A, putting it into the top 20% of all stocks we cover from this look. This makes Diebold Nixdorf a solid choice for value investors, and some of its other key metrics make this pretty clear too.
For example, its P/CF ratio (another great indicator of value) comes in at 2.84, which is far better than the industry average of 14.65. Clearly, DBD is a solid choice on the value front from multiple angles.
What About the Stock Overall?
Though Diebold Nixdorf might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of A and a Momentum score of C. This gives DBD a Zacks VGM score—or its overarching fundamental grade—of A. (You can read more about the Zacks Style Scores here >>)
Meanwhile, the company’s recent earnings estimates have been encouraging. The current quarter as well as the full year has seen two estimates go higher in the past sixty days compared to none lower.
As a result, the current quarter consensus estimate has risen by 55% in the past two months, while the full year estimate has increased significantly. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Diebold Nixdorf, Incorporated Price and Consensus
Diebold Nixdorf, Incorporated price-consensus-chart | Diebold Nixdorf, Incorporated Quote
Even though Diebold Nixdorf has a better estimates trend, the stock has just a Zacks Rank #3 (Hold). That is why we are looking for in-line performance from the company in the near term.
Bottom Line
Diebold Nixdorf is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. With a solid industry rank (among the Top 31%), Diebold Nixdorf looks like a strong value contender. In fact, over the past two years, the industry has clearly outperformed the broader market, as you can see below:
So, despite a Zacks Rank #3, we believe that bullish analyst sentiment and favorable industry factors make this value stock a compelling pick.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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