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Should Value Investors Buy KBR Inc. (KBR) 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.

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.

KBR Inc. (KBR - Free Report) is a stock many investors are watching right now. KBR is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 10.09, which compares to its industry's average of 11.32. Over the last 12 months, KBR's Forward P/E has been as high as 16.07 and as low as 8.27, with a median of 12.42.

We should also highlight that KBR has a P/B ratio of 1.46. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.53. Over the past year, KBR's P/B has been as high as 2.48 and as low as 1.19, with a median of 1.68.

Finally, our model also underscores that KBR has a P/CF ratio of 4.24. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 10.86. Within the past 12 months, KBR's P/CF has been as high as 6.27 and as low as 3.46, with a median of 4.76.

Value investors will likely look at more than just these metrics, but the above data helps show that KBR Inc. Is likely undervalued currently. And when considering the strength of its earnings outlook, KBR sticks out at as one of the market's strongest value stocks.


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