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Is Heartland Financial USA (HTLF) 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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.

Heartland Financial USA (HTLF - Free Report) is a stock many investors are watching right now. HTLF is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 8.13 right now. For comparison, its industry sports an average P/E of 10.59. Over the past 52 weeks, HTLF's Forward P/E has been as high as 9.49 and as low as 5.51, with a median of 6.97.

Another valuation metric that we should highlight is HTLF's P/B ratio of 0.93. 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. HTLF's current P/B looks attractive when compared to its industry's average P/B of 1.87. Over the past year, HTLF's P/B has been as high as 1.33 and as low as 0.66, with a median of 0.78.

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. HTLF has a P/S ratio of 1.54. This compares to its industry's average P/S of 1.89.

Finally, we should also recognize that HTLF has a P/CF ratio of 6.04. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 10.33. HTLF's P/CF has been as high as 7.35 and as low as 3.90, with a median of 4.94, all within the past year.

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


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