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Is MetLife (MET) Stock Undervalued Right Now?

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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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

MetLife (MET) is a stock many investors are watching right now. MET is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 8.10. This compares to its industry's average Forward P/E of 9.69. Over the past year, MET's Forward P/E has been as high as 9.77 and as low as 7.35, with a median of 8.52.

We should also highlight that MET has a P/B ratio of 0.96. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. MET's current P/B looks attractive when compared to its industry's average P/B of 1.66. MET's P/B has been as high as 1.09 and as low as 0.69, with a median of 0.79, over the past year.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. MET has a P/S ratio of 0.72. This compares to its industry's average P/S of 0.75.

Finally, investors will want to recognize that MET has a P/CF ratio of 7.90. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. MET's P/CF compares to its industry's average P/CF of 7.99. MET's P/CF has been as high as 46.53 and as low as 7.54, with a median of 9.62, all within the past year.

MGIC Investment (MTG) may be another strong Insurance - Multi line stock to add to your shortlist. MTG is a # 2 (Buy) stock with a Value grade of A.

MGIC Investment is currently trading with a Forward P/E ratio of 5.64 while its PEG ratio sits at 1.13. Both of the company's metrics compare favorably to its industry's average P/E of 9.69 and average PEG ratio of 1.01.

MTG's price-to-earnings ratio has been as high as 8.56 and as low as 5.06, with a median of 7.40, while its PEG ratio has been as high as 1.71 and as low as 1.01, with a median of 1.48, all within the past year.

MGIC Investment sports a P/B ratio of 0.85 as well; this compares to its industry's price-to-book ratio of 1.66. In the past 52 weeks, MTG's P/B has been as high as 1.11, as low as 0.77, with a median of 0.97.

These figures are just a handful of the metrics value investors tend to look at, but they help show that MetLife and MGIC Investment are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MET and MTG feels like a great value stock at the moment.


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