Back to top

Should Value Investors Buy PG&E (PCG) Stock?

Read MoreHide Full Article

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.

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.

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.

One stock to keep an eye on is PG&E (PCG - Free Report) . PCG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

Investors will also notice that PCG has a PEG ratio of 1.99. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PCG's industry currently sports an average PEG of 2.47. Within the past year, PCG's PEG has been as high as 3.54 and as low as 0.46, with a median of 2.08.

Investors should also recognize that PCG has a P/B ratio of 0.72. 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. This stock's P/B looks solid versus its industry's average P/B of 1.75. Within the past 52 weeks, PCG's P/B has been as high as 1.29 and as low as 0.26, with a median of 0.87.

These are just a handful of the figures considered in PG&E'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 PCG 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:


Pacific Gas & Electric Co. (PCG) - free report >>

Published in