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Is Deluxe (DLX) 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Deluxe (DLX - Free Report) . DLX is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 6.80. This compares to its industry's average Forward P/E of 12.11. Over the last 12 months, DLX's Forward P/E has been as high as 7.11 and as low as 4.71, with a median of 5.87.

DLX is also sporting a PEG ratio of 0.57. 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. DLX's PEG compares to its industry's average PEG of 1.11. Within the past year, DLX's PEG has been as high as 0.59 and as low as 0.39, with a median of 0.49.

Another notable valuation metric for DLX is its P/B ratio of 1.65. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. DLX's current P/B looks attractive when compared to its industry's average P/B of 2.44. Over the past 12 months, DLX's P/B has been as high as 1.71 and as low as 1.11, with a median of 1.39.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by 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. DLX has a P/S ratio of 0.47. This compares to its industry's average P/S of 0.5.

Finally, investors will want to recognize that DLX has a P/CF ratio of 3.97. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 11.03. Over the past 52 weeks, DLX's P/CF has been as high as 4.13 and as low as 2.49, with a median of 3.46.

These are just a handful of the figures considered in Deluxe's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DLX is an impressive value stock right now.


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