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Should Value Investors Buy Dun & Bradstreet (DNB) Stock?

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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.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. 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.

One company value investors might notice is Dun & Bradstreet (DNB - Free Report) . DNB is currently holding a Zacks Rank #2 (Buy) and a Value grade of A.

DNB is also sporting a PEG ratio of 1.87. 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. DNB's PEG compares to its industry's average PEG of 2.52. Within the past year, DNB's PEG has been as high as 2.87 and as low as 1.53, with a median of 2.01.

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 preferred metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DNB has a P/S ratio of 1.69. This compares to its industry's average P/S of 4.

These are just a handful of the figures considered in Dun & Bradstreet'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 DNB is an impressive value stock right now.


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