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Are Investors Undervaluing South Jersey Industries (SJI) Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of 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.

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 South Jersey Industries (SJI - Free Report) . SJI is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 16.38 right now. For comparison, its industry sports an average P/E of 21.35. Over the last 12 months, SJI's Forward P/E has been as high as 30.26 and as low as 12.88, with a median of 21.02.

Investors will also notice that SJI has a PEG ratio of 1.61. 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. SJI's industry has an average PEG of 2.56 right now. Within the past year, SJI's PEG has been as high as 3.57 and as low as 1.26, with a median of 2.52.

We should also highlight that SJI has a P/B ratio of 1.61. The P/B ratio pits a stock's market value against 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 2.64. Over the past 12 months, SJI's P/B has been as high as 2.16 and as low as 1.31, with a median of 2.03.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. SJI has a P/S ratio of 1.53. This compares to its industry's average P/S of 1.61.

Finally, we should also recognize that SJI has a P/CF ratio of 10.72. 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. SJI's P/CF compares to its industry's average P/CF of 12.17. Over the past year, SJI's P/CF has been as high as 24.89 and as low as 8.84, with a median of 13.72.

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


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