Is Hillenbrand (HI) 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

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 Hillenbrand (HI). HI 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 11.16, which compares to its industry's average of 15.65. Over the past 52 weeks, HI's Forward P/E has been as high as 13.75 and as low as 9.43, with a median of 11.66.

Investors will also notice that HI has a PEG ratio of 0.93. 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. HI's industry has an average PEG of 1.57 right now. Over the past 52 weeks, HI's PEG has been as high as 1.15 and as low as 0.79, with a median of 0.97.

Another valuation metric that we should highlight is HI's P/B ratio of 2.79. 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 stock's P/B looks solid versus its industry's average P/B of 4.41. Over the past 12 months, HI's P/B has been as high as 3.16 and as low as 2.21, with a median of 2.64.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. HI has a P/S ratio of 1.1. This compares to its industry's average P/S of 1.29.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Hillenbrand is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, HI feels like a great value stock at the moment.

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