Back to top

Are Investors Undervaluing Invesco (IVZ) Right Now?

Read MoreHide Full Article

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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 Invesco (IVZ - Free Report) . IVZ is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.81, which compares to its industry's average of 12.25. IVZ's Forward P/E has been as high as 10.18 and as low as 6.15, with a median of 8.55, all within the past year.

IVZ is also sporting a PEG ratio of 1.09. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IVZ's industry currently sports an average PEG of 1.73. Within the past year, IVZ's PEG has been as high as 1.14 and as low as 0.76, with a median of 0.93.

We should also highlight that IVZ has a P/B ratio of 0.91. 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. IVZ's current P/B looks attractive when compared to its industry's average P/B of 1.72. Over the past year, IVZ's P/B has been as high as 1.41 and as low as 0.69, with a median of 1.01.

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 prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. IVZ has a P/S ratio of 1.52. This compares to its industry's average P/S of 2.77.

Finally, investors should note that IVZ has a P/CF ratio of 8.21. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 12.60. IVZ's P/CF has been as high as 10.12 and as low as 4.94, with a median of 7.70, all within the past year.

These are just a handful of the figures considered in Invesco'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 IVZ is an impressive value stock right now.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Invesco Ltd. (IVZ) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in