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Should Value Investors Buy Deluxe (DLX) Stock?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Deluxe (DLX - Free Report) . DLX is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 6.77. This compares to its industry's average Forward P/E of 11.42. Over the past 52 weeks, DLX's Forward P/E has been as high as 7.19 and as low as 5.35, with a median of 5.99.

We also note that DLX holds a PEG ratio of 0.56. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. DLX's industry currently sports an average PEG of 1.05. Over the last 12 months, DLX's PEG has been as high as 0.60 and as low as 0.45, with a median of 0.50.

We should also highlight that DLX has a P/B ratio of 1.71. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.18. DLX's P/B has been as high as 1.75 and as low as 1.30, with a median of 1.45, over the past year.

Finally, our model also underscores that DLX has a P/CF ratio of 3.68. 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 8.89. Over the past year, DLX's P/CF has been as high as 4.20 and as low as 2.89, with a median of 3.53.

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


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