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Is Manulife Financial (MFC) a Great Value Stock 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

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.

Manulife Financial (MFC - Free Report) is a stock many investors are watching right now. MFC is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.07, which compares to its industry's average of 8.64. Over the last 12 months, MFC's Forward P/E has been as high as 8.76 and as low as 3.88, with a median of 7.15.

We also note that MFC holds a PEG ratio of 0.81. 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. MFC's PEG compares to its industry's average PEG of 0.89. Within the past year, MFC's PEG has been as high as 3.41 and as low as 0.39, with a median of 0.74.

Another valuation metric that we should highlight is MFC's P/B ratio of 0.97. 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. MFC's current P/B looks attractive when compared to its industry's average P/B of 1.32. Over the past 12 months, MFC's P/B has been as high as 1.18 and as low as 0.50, with a median of 0.76.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. MFC has a P/S ratio of 0.69. This compares to its industry's average P/S of 0.75.

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


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