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Is Principal Financial Group (PFG) Stock Undervalued 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.

One stock to keep an eye on is Principal Financial Group (PFG - Free Report) . PFG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 11.28. This compares to its industry's average Forward P/E of 12.20. PFG's Forward P/E has been as high as 11.61 and as low as 8.62, with a median of 10.12, all within the past year.

We should also highlight that PFG has a P/B ratio of 1.79. 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 company's current P/B looks solid when compared to its industry's average P/B of 2.46. Over the past 12 months, PFG's P/B has been as high as 1.81 and as low as 1.02, with a median of 1.23.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. PFG has a P/S ratio of 1.15. This compares to its industry's average P/S of 2.44.

Value investors will likely look at more than just these metrics, but the above data helps show that Principal Financial Group is likely undervalued currently. And when considering the strength of its earnings outlook, PFG sticks out at as one of the market's strongest value stocks.


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