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Should Value Investors Buy Manulife Financial Corp (MFC) Stock?

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.

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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.

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 stock to keep an eye on is Manulife Financial Corp (MFC). MFC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A.

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Another notable valuation metric for MFC is its P/B ratio of 1.15. 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. This stock's P/B looks attractive against its industry's average P/B of 1.49. Over the past 12 months, MFC's P/B has been as high as 1.19 and as low as 0.77, with a median of 0.88.

Finally, investors will want to recognize that MFC has a P/CF ratio of 7.34. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 11.15. Over the past year, MFC's P/CF has been as high as 7.60 and as low as 3.70, with a median of 5.48.

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

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Zacks Investment Research