Is Popular (BPOP) Stock Undervalued Right Now?

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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 to watch right now is Popular (BPOP). BPOP is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 9.76, which compares to its industry's average of 11.31. Over the past 52 weeks, BPOP's Forward P/E has been as high as 11.26 and as low as 7.81, with a median of 9.45.

BPOP is also sporting a PEG ratio of 0.61. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BPOP's PEG compares to its industry's average PEG of 1.48. BPOP's PEG has been as high as 0.92 and as low as 0.50, with a median of 0.61, all within the past year.

We should also highlight that BPOP has a P/B ratio of 1.35. 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. BPOP's current P/B looks attractive when compared to its industry's average P/B of 1.92. Over the past year, BPOP's P/B has been as high as 1.41 and as low as 0.98, with a median of 1.25.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BPOP has a P/S ratio of 1.79. This compares to its industry's average P/S of 2.2.

Finally, investors will want to recognize that BPOP has a P/CF ratio of 16.59. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 16.89. Over the past year, BPOP's P/CF has been as high as 19.54 and as low as 11.90, with a median of 16.67.

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

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This article originally published on Zacks Investment Research (zacks.com).

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