Back to top

Image: Bigstock

Should Value Investors Buy Stifel Financial (SF) Stock?

Read MoreHide Full Article

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 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 stock to keep an eye on is Stifel Financial (SF - Free Report) . SF is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

We should also highlight that SF has a P/B ratio of 1.85. 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 3.24. Over the past 12 months, SF's P/B has been as high as 1.86 and as low as 1.27, with a median of 1.46.

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. SF has a P/S ratio of 1.83. This compares to its industry's average P/S of 2.15.

Finally, investors should note that SF has a P/CF ratio of 11.95. 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. SF's P/CF compares to its industry's average P/CF of 24.84. SF's P/CF has been as high as 11.96 and as low as 7.43, with a median of 8.99, all within the past year.

These are only a few of the key metrics included in Stifel Financial'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, SF looks like an impressive value stock at the moment.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Stifel Financial Corporation (SF) - free report >>

Published in