Is PG&E (PCG) Stock Undervalued Right Now?

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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

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.

One stock to keep an eye on 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 1.02. 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. PCG's industry has an average PEG of 2.42 right now. Within the past year, PCG's PEG has been as high as 2.67 and as low as 0.41, with a median of 1.37.

Investors should also recognize that PCG has a P/B ratio of 0.61. 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 solid versus its industry's average P/B of 1.75. PCG's P/B has been as high as 1.17 and as low as 0.22, with a median of 0.71, over the past year.

These are only a few of the key metrics included in PG&E's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, PCG looks like an impressive value stock at the moment.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Pacific Gas & Electric Co. (PCG) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research