Is Hill-Rom (HRC) Stock Undervalued Right Now?
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.
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.
One stock to keep an eye on is Hill-Rom (HRC). HRC is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 19.05, which compares to its industry’s average of 22.57. Over the past year, HRC’s Forward P/E has been as high as 20.28 and as low as 16.60, with a median of 18.04.
We also note that HRC holds a PEG ratio of 1.38. 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. HRC’s PEG compares to its industry’s average PEG of 2.16. Over the last 12 months, HRC’s PEG has been as high as 1.80 and as low as 1.24, with a median of 1.47.
Finally, investors should note that HRC has a P/CF ratio of 16.06. 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 24.67. Over the past year, HRC’s P/CF has been as high as 17.57 and as low as 13.15, with a median of 15.21.
Value investors will likely look at more than just these metrics, but the above data helps show that Hill-Rom is likely undervalued currently. And when considering the strength of its earnings outlook, HRC sticks out at as one of the market’s strongest value stocks.
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