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Why Lithia Motors, Inc. (LAD) Could Be a Top Value Stock Pick

Zacks Equity Research
Updated

Value investing is always a very popular strategy, and for good reason. After all, who doesn’t want to find stocks that have low PEs, solid outlooks, and decent dividends?

Fortunately for investors looking for this combination, we have identified a strong candidate which may be an impressive value; Lithia Motors LAD.

Lithia Motors in Focus

LAD may be an interesting play thanks to its forward PE of 12.2, its P/S ratio of 0.3, and its decent dividend yield of 1%. These factors suggest that Lithia Motors is a pretty good value pick, as investors have to pay a relatively low level for each dollar of earnings, and that LAD has decent revenue metrics to back up its earnings.

Lithia Motors, Inc. PE Ratio (TTM)

Lithia Motors, Inc. PE Ratio (TTM) | Lithia Motors, Inc. Quote

But before you think that Lithia Motors is just a pure value play, it is important to note that it has been seeing solid activity on the earnings estimate front as well. For current year earnings, the consensus has gone up by 3.1% in the past 30 days, thanks to five upward revisions in the past one month compared to none lower.

This estimate strength is actually enough to push LAD to a Zacks Rank #1 (Strong Buy), suggesting it is poised to outperform. You can see the complete list of today’s Zacks #1 Rank stocks here.

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So really, Lithia Motors is looking great from a number of angles thanks to its PE below 20, a P/S ratio below one, and a strong Zacks Rank, meaning that this company could be a great choice for value investors at this time.

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Lithia Motors, Inc. (LAD) : Free Stock Analysis Report
 
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Zacks Investment Research