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Is Merck KGaA (MKKGY) a Great Value Stock Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Merck KGaA (MKKGY - Free Report) is a stock many investors are watching right now. MKKGY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

MKKGY is also sporting a PEG ratio of 2.26. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MKKGY's PEG compares to its industry's average PEG of 2.30. MKKGY's PEG has been as high as 2.31 and as low as 2.22, with a median of 2.30, all within the past year.

Another notable valuation metric for MKKGY is its P/B ratio of 0.69. 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 solid versus its industry's average P/B of 1.34. Over the past 12 months, MKKGY's P/B has been as high as 0.84 and as low as 0.61, with a median of 0.73.

These are just a handful of the figures considered in Merck KGaA'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 MKKGY is an impressive value stock right now.


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