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Should Value Investors Buy Lloyds Banking Group (LYG) Stock?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Lloyds Banking Group (LYG - Free Report) is a stock many investors are watching right now. LYG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 6.21, which compares to its industry's average of 8.35. LYG's Forward P/E has been as high as 9.47 and as low as 5.48, with a median of 6.99, all within the past year.
Investors should also note that LYG holds a PEG ratio of 0.20. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LYG's PEG compares to its industry's average PEG of 0.49. LYG's PEG has been as high as 0.30 and as low as 0.18, with a median of 0.22, all within the past year.
Investors should also recognize that LYG has a P/B ratio of 0.60. The P/B ratio pits a stock's market value against 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 1.41. Over the past 12 months, LYG's P/B has been as high as 0.73 and as low as 0.50, with a median of 0.59.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. LYG has a P/S ratio of 1.21. This compares to its industry's average P/S of 1.22.
Value investors will likely look at more than just these metrics, but the above data helps show that Lloyds Banking Group is likely undervalued currently. And when considering the strength of its earnings outlook, LYG sticks out at as one of the market's strongest value stocks.
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Should Value Investors Buy Lloyds Banking Group (LYG) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Lloyds Banking Group (LYG - Free Report) is a stock many investors are watching right now. LYG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 6.21, which compares to its industry's average of 8.35. LYG's Forward P/E has been as high as 9.47 and as low as 5.48, with a median of 6.99, all within the past year.
Investors should also note that LYG holds a PEG ratio of 0.20. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LYG's PEG compares to its industry's average PEG of 0.49. LYG's PEG has been as high as 0.30 and as low as 0.18, with a median of 0.22, all within the past year.
Investors should also recognize that LYG has a P/B ratio of 0.60. The P/B ratio pits a stock's market value against 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 1.41. Over the past 12 months, LYG's P/B has been as high as 0.73 and as low as 0.50, with a median of 0.59.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's 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. LYG has a P/S ratio of 1.21. This compares to its industry's average P/S of 1.22.
Value investors will likely look at more than just these metrics, but the above data helps show that Lloyds Banking Group is likely undervalued currently. And when considering the strength of its earnings outlook, LYG sticks out at as one of the market's strongest value stocks.