Should Value Investors Buy China Life (LFC) Stock?

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.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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 value investors might notice is China Life (LFC). LFC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 7.61, while its industry has an average P/E of 8.64. Over the past year, LFC's Forward P/E has been as high as 12.87 and as low as 6.11, with a median of 8.96.

Investors should also recognize that LFC has a P/B ratio of 1. 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 company's current P/B looks solid when compared to its industry's average P/B of 1.32. LFC's P/B has been as high as 1.40 and as low as 0.81, with a median of 1.06, over the past year.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. LFC has a P/S ratio of 0.58. This compares to its industry's average P/S of 0.75.

These are only a few of the key metrics included in China Life'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, LFC looks like an impressive value stock at the moment.

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China Life Insurance Company Limited (LFC) : Free Stock Analysis Report
 
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