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Is Tyson Foods (TSN) a Great Value Stock Right Now?
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 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 Tyson Foods (TSN - Free Report) . TSN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 11.37. This compares to its industry's average Forward P/E of 14.37. Over the past year, TSN's Forward P/E has been as high as 13.51 and as low as 10.77, with a median of 11.76.
Investors should also note that TSN holds a PEG ratio of 1.52. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TSN's industry has an average PEG of 1.85 right now. Within the past year, TSN's PEG has been as high as 5.26 and as low as 1.44, with a median of 1.80.
Investors should also recognize that TSN has a P/B ratio of 1.84. 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. This stock's P/B looks attractive against its industry's average P/B of 2.46. Within the past 52 weeks, TSN's P/B has been as high as 1.94 and as low as 1.52, with a median of 1.71.
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. TSN has a P/S ratio of 0.69. This compares to its industry's average P/S of 0.77.
Finally, we should also recognize that TSN has a P/CF ratio of 6.89. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. TSN's current P/CF looks attractive when compared to its industry's average P/CF of 15.07. Over the past 52 weeks, TSN's P/CF has been as high as 8.60 and as low as 6.39, with a median of 7.47.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Tyson Foods is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TSN feels like a great value stock at the moment.