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Are Investors Undervaluing PG&E (PCG) Right Now?

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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 use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One company to watch right now is PG&E (PCG). PCG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

We also note that PCG holds a PEG ratio of 1.64. 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. PCG's industry currently sports an average PEG of 2.40. Over the past 52 weeks, PCG's PEG has been as high as 2.67 and as low as 0.41, with a median of 1.54.

We should also highlight that PCG has a P/B ratio of 0.99. 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 attractive against its industry's average P/B of 1.75. Over the past year, PCG's P/B has been as high as 1.17 and as low as 0.22, with a median of 0.72.

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


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