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5 Low Price-to-Book Stocks to Watch for Strong Returns This April
Value investors typically rely on price-to-earnings (P/E) and price-to-sales (P/S) ratios to spot undervalued stocks with strong return potential. However, the often-overlooked price-to-book (P/B) ratio is also a simple and effective valuation metric. It compares a company's market price with its book value.
The P/B ratio is calculated as:
P/B ratio = market price per share ÷ book value of equity per share
This ratio indicates how much investors are willing to pay relative to a company's book value. For instance, if a stock trades at $10 and its book value per share is $5, investors are paying twice its book value. Generally, a P/B ratio below 1.0 suggests potential undervaluation, though many value investors consider stocks with a P/B below 3.0 as attractive.
This metric can help identify attractively priced stocks with upside potential like PagSeguro Digital,Mistras Group, Strategic Education, NatWest Group plc and PG&E Corp..
What Is Book Value?
There are several ways in which book value can be defined. Book value is the total value that would be left over, according to the company's balance sheet, if it went bankrupt immediately. In other words, this is what shareholders would theoretically receive if a company liquidates all its assets after paying off all its liabilities.
It is calculated by subtracting total liabilities from the total assets of a company. In most cases, this equates to common stockholders' equity on the balance sheet. However, depending on the company's balance sheet, intangible assets should also be subtracted from total assets to determine book value.
Understanding P/B Ratio
By comparing the book value of equity to its market price, we get an idea of whether a company is under- or overpriced. Like P/E or P/S ratios, it is always better to compare the P/B ratio within industries.
A P/B ratio of less than one means that the stock is trading at less than its book value or the stock is undervalued and, therefore, a good buy. Conversely, a stock with a ratio greater than one can be interpreted as being overvalued or relatively expensive.
For example, a stock with a P/B ratio of 2 means that we pay $2 for every $1 of book value. Thus, the higher the P/B, the more expensive the stock.
But there is a warning. A P/B ratio of less than one can also mean that the company is earning weak or even negative returns on its assets or that the assets are overstated. In such a case, the stock should be shunned because it may be destroying shareholder value. Conversely, the stock's price may be significantly high — thereby pushing the P/B ratio to more than one — in the likely case that it has become a takeover target, a good enough reason to own the stock.
Moreover, the P/B ratio is not without limitations. It is useful for businesses like finance, investments, insurance and banking or manufacturing companies with many liquid/tangible assets on the books. However, it can be misleading for firms with significant R&D expenditure, high debt, service companies, or those with negative earnings.
In any case, the ratio is not particularly relevant as a standalone number. One should analyze other ratios like P/E, P/S and debt to equity before arriving at a reasonable investment decision.
5 Low Price-to-Book Stocks
Here are five of the 15 stocks that qualified for the screening:
São Paulo, Brazil-based PagSeguro Digital is one of the largest digital banks in Brazil, promoting innovative solutions in financial services and payment methods.
NJ-based Mistras Group is a global provider of technology-enabled, non-destructive testing solutions used to evaluate the structural integrity of critical energy, industrial and public infrastructure. Mistras Group currently has a Zacks Rank #1 and a Value Score of B. MG has a projected 3-5-year EPS growth rate of 16.0%.
Herndon, VA-based Strategic Education, through its subsidiaries Strayer University and New York Code and Design Academy (NYCDA), provides a range of post-secondary education and other academic programs in the United States. NYCDA is a New York City-based provider of web and application software development courses. Strategic Education has a projected 3-5-year EPS growth rate of 15%.
STRA currently has a Zacks Rank #1 and a Value Score of B.
NatWest Group provides personal and commercial banking and other financial solutions. NatWest Group, formerly known as The Royal Bank of Scotland Group plc, is based in Edinburgh, the United Kingdom. NatWest Group has a Zacks Rank #2 and a Value Score of B. PAX has a projected 3-5-year EPS growth rate of 15.3%.
San Francisco, CA-based PG&E Corporation is the parent holding company of California's largest regulated electric and gas utility, Pacific Gas and Electric Company. The utility generates revenues mainly through the sale and delivery of electricity and natural gas to customers. It engages in the business of electricity and natural gas distribution; electricity generation, procurement, and transmission; and natural gas procurement, transportation and storage. The utility also operates hydro-electric, nuclear and fossil fuel power plants. This Zacks Rank #2 company has a Value Score of A. PCG has a projected 3-5-year EPS growth rate of 15.9%.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
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Zacks.com featured highlights include PagSeguro Digital, Mistras Group, Strategic Education, NatWest Group plc and PG&E
For Immediate Release
Chicago, IL – April 8, 2026 – Stocks in this week’s article are PagSeguro Digital (PAGS - Free Report) , Mistras Group (MG - Free Report) , Strategic Education (STRA - Free Report) , NatWest Group plc (NWG - Free Report) and PG&E Corp. (PCG - Free Report) .
5 Low Price-to-Book Stocks to Watch for Strong Returns This April
Value investors typically rely on price-to-earnings (P/E) and price-to-sales (P/S) ratios to spot undervalued stocks with strong return potential. However, the often-overlooked price-to-book (P/B) ratio is also a simple and effective valuation metric. It compares a company's market price with its book value.
The P/B ratio is calculated as:
P/B ratio = market price per share ÷ book value of equity per share
This ratio indicates how much investors are willing to pay relative to a company's book value. For instance, if a stock trades at $10 and its book value per share is $5, investors are paying twice its book value. Generally, a P/B ratio below 1.0 suggests potential undervaluation, though many value investors consider stocks with a P/B below 3.0 as attractive.
This metric can help identify attractively priced stocks with upside potential like PagSeguro Digital,Mistras Group, Strategic Education, NatWest Group plc and PG&E Corp..
What Is Book Value?
There are several ways in which book value can be defined. Book value is the total value that would be left over, according to the company's balance sheet, if it went bankrupt immediately. In other words, this is what shareholders would theoretically receive if a company liquidates all its assets after paying off all its liabilities.
It is calculated by subtracting total liabilities from the total assets of a company. In most cases, this equates to common stockholders' equity on the balance sheet. However, depending on the company's balance sheet, intangible assets should also be subtracted from total assets to determine book value.
Understanding P/B Ratio
By comparing the book value of equity to its market price, we get an idea of whether a company is under- or overpriced. Like P/E or P/S ratios, it is always better to compare the P/B ratio within industries.
A P/B ratio of less than one means that the stock is trading at less than its book value or the stock is undervalued and, therefore, a good buy. Conversely, a stock with a ratio greater than one can be interpreted as being overvalued or relatively expensive.
For example, a stock with a P/B ratio of 2 means that we pay $2 for every $1 of book value. Thus, the higher the P/B, the more expensive the stock.
But there is a warning. A P/B ratio of less than one can also mean that the company is earning weak or even negative returns on its assets or that the assets are overstated. In such a case, the stock should be shunned because it may be destroying shareholder value. Conversely, the stock's price may be significantly high — thereby pushing the P/B ratio to more than one — in the likely case that it has become a takeover target, a good enough reason to own the stock.
Moreover, the P/B ratio is not without limitations. It is useful for businesses like finance, investments, insurance and banking or manufacturing companies with many liquid/tangible assets on the books. However, it can be misleading for firms with significant R&D expenditure, high debt, service companies, or those with negative earnings.
In any case, the ratio is not particularly relevant as a standalone number. One should analyze other ratios like P/E, P/S and debt to equity before arriving at a reasonable investment decision.
5 Low Price-to-Book Stocks
Here are five of the 15 stocks that qualified for the screening:
São Paulo, Brazil-based PagSeguro Digital is one of the largest digital banks in Brazil, promoting innovative solutions in financial services and payment methods.
PAGS currently has a Value Score of A and a Zacks Rank #2. PAGS has a projected 3-5-year EPS growth rate of 14.9%. You can see the complete list of today's Zacks #1 Rank stocks here.
NJ-based Mistras Group is a global provider of technology-enabled, non-destructive testing solutions used to evaluate the structural integrity of critical energy, industrial and public infrastructure. Mistras Group currently has a Zacks Rank #1 and a Value Score of B. MG has a projected 3-5-year EPS growth rate of 16.0%.
Herndon, VA-based Strategic Education, through its subsidiaries Strayer University and New York Code and Design Academy (NYCDA), provides a range of post-secondary education and other academic programs in the United States. NYCDA is a New York City-based provider of web and application software development courses. Strategic Education has a projected 3-5-year EPS growth rate of 15%.
STRA currently has a Zacks Rank #1 and a Value Score of B.
NatWest Group provides personal and commercial banking and other financial solutions. NatWest Group, formerly known as The Royal Bank of Scotland Group plc, is based in Edinburgh, the United Kingdom. NatWest Group has a Zacks Rank #2 and a Value Score of B. PAX has a projected 3-5-year EPS growth rate of 15.3%.
San Francisco, CA-based PG&E Corporation is the parent holding company of California's largest regulated electric and gas utility, Pacific Gas and Electric Company. The utility generates revenues mainly through the sale and delivery of electricity and natural gas to customers. It engages in the business of electricity and natural gas distribution; electricity generation, procurement, and transmission; and natural gas procurement, transportation and storage. The utility also operates hydro-electric, nuclear and fossil fuel power plants. This Zacks Rank #2 company has a Value Score of A. PCG has a projected 3-5-year EPS growth rate of 15.9%.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2895450/5-low-price-to-book-stocks-to-watch-for-strong-returns-this-april
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
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Company: Zacks.com
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Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.