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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
One company value investors might notice is Dow (DOW - Free Report) . DOW is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.33 right now. For comparison, its industry sports an average P/E of 12.31. DOW's Forward P/E has been as high as 14.61 and as low as 6.35, with a median of 8.99, all within the past year.
We also note that DOW holds a PEG ratio of 0.31. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DOW's industry has an average PEG of 0.77 right now. DOW's PEG has been as high as 0.75 and as low as 0.21, with a median of 0.31, all within 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. DOW has a P/S ratio of 0.88. This compares to its industry's average P/S of 0.89.
Finally, we should also recognize that DOW has a P/CF ratio of 5.48. 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. This stock's P/CF looks attractive against its industry's average P/CF of 6.45. Within the past 12 months, DOW's P/CF has been as high as 10.98 and as low as 4.54, with a median of 5.17.
These are just a handful of the figures considered in Dow's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DOW is an impressive value stock right now.
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Is Dow (DOW) Stock Undervalued Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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.
One company value investors might notice is Dow (DOW - Free Report) . DOW is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 9.33 right now. For comparison, its industry sports an average P/E of 12.31. DOW's Forward P/E has been as high as 14.61 and as low as 6.35, with a median of 8.99, all within the past year.
We also note that DOW holds a PEG ratio of 0.31. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DOW's industry has an average PEG of 0.77 right now. DOW's PEG has been as high as 0.75 and as low as 0.21, with a median of 0.31, all within 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. DOW has a P/S ratio of 0.88. This compares to its industry's average P/S of 0.89.
Finally, we should also recognize that DOW has a P/CF ratio of 5.48. 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. This stock's P/CF looks attractive against its industry's average P/CF of 6.45. Within the past 12 months, DOW's P/CF has been as high as 10.98 and as low as 4.54, with a median of 5.17.
These are just a handful of the figures considered in Dow's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DOW is an impressive value stock right now.