Back to top

Image: Bigstock

Is Invesco (IVZ) Stock Undervalued 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.

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 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 to watch right now is Invesco (IVZ - Free Report) . IVZ is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 6.58, while its industry has an average P/E of 13.43. Over the past year, IVZ's Forward P/E has been as high as 9.14 and as low as 5.79, with a median of 7.70.

IVZ is also sporting a PEG ratio of 0.79. 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. IVZ's PEG compares to its industry's average PEG of 1.38. IVZ's PEG has been as high as 1.16 and as low as 0.69, with a median of 0.92, all within the past year.

Investors should also recognize that IVZ has a P/B ratio of 0.81. 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. IVZ's current P/B looks attractive when compared to its industry's average P/B of 1.84. Over the past year, IVZ's P/B has been as high as 0.98 and as low as 0.69, with a median of 0.82.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. IVZ has a P/S ratio of 1.45. This compares to its industry's average P/S of 2.52.

Finally, investors will want to recognize that IVZ has a P/CF ratio of 11.47. 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. IVZ's current P/CF looks attractive when compared to its industry's average P/CF of 17.67. Over the past year, IVZ's P/CF has been as high as 12.06 and as low as 6.91, with a median of 9.13.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Invesco is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, IVZ feels like a great value stock at the moment.


In-Depth Zacks Research for the Tickers Above


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


Invesco Ltd. (IVZ) - free report >>

Published in