While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
Equitrans Midstream Corporation (ETRN - Free Report) is a stock many investors are watching right now. ETRN is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 8.35, which compares to its industry's average of 22.81. ETRN's Forward P/E has been as high as 16.39 and as low as 7.48, with a median of 10.67, all within the past year.
We also note that ETRN holds a PEG ratio of 1.14. 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. ETRN's industry currently sports an average PEG of 3. Over the last 12 months, ETRN's PEG has been as high as 2.34 and as low as 1.07, with a median of 1.59.
We should also highlight that ETRN has a P/B ratio of 0.59. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.36. Over the past year, ETRN's P/B has been as high as 1.20 and as low as 0.51, with a median of 0.96.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Equitrans Midstream Corporation is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ETRN feels like a great value stock at the moment.