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Should Value Investors Buy Equitrans Midstream Corporation (ETRN) Stock?

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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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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.

Equitrans Midstream Corporation (ETRN - Free Report) is a stock many investors are watching right now. ETRN is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A.

ETRN is also sporting a PEG ratio of 1.14. 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. ETRN's PEG compares to its industry's average PEG of 2.83. ETRN's PEG has been as high as 1.74 and as low as 1.07, with a median of 1.49, all within the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ETRN has a P/S ratio of 1.62. This compares to its industry's average P/S of 1.63.

Value investors will likely look at more than just these metrics, but the above data helps show that Equitrans Midstream Corporation is likely undervalued currently. And when considering the strength of its earnings outlook, ETRN sticks out at as one of the market's strongest value stocks.


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