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Should Value Investors Buy Bristol-Myers Squibb (BMY) Stock?

Zacks Equity Research

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is Bristol-Myers Squibb (BMY). BMY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 9.18, which compares to its industry's average of 16.08. BMY's Forward P/E has been as high as 14.36 and as low as 7.25, with a median of 10.14, all within the past year.

Investors will also notice that BMY has a PEG ratio of 1.09. 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. BMY's industry currently sports an average PEG of 2.09. Over the past 52 weeks, BMY's PEG has been as high as 2.22 and as low as 0.76, with a median of 1.22.

Another notable valuation metric for BMY is its P/B ratio of 2.75. 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 company's current P/B looks solid when compared to its industry's average P/B of 6.84. BMY's P/B has been as high as 5.89 and as low as 2, with a median of 4.65, over the past year.

These are just a handful of the figures considered in Bristol-Myers Squibb's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that BMY is an impressive value stock right now.


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