Are Investors Undervaluing United Fire Group (UFCS) 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

United Fire Group (UFCS) is a stock many investors are watching right now. UFCS is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 10.16. This compares to its industry's average Forward P/E of 26.95. Over the past year, UFCS's Forward P/E has been as high as 20.43 and as low as 9.98, with a median of 11.30.

Another notable valuation metric for UFCS is its P/B ratio of 0.94. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. UFCS's current P/B looks attractive when compared to its industry's average P/B of 1.44. Over the past 12 months, UFCS's P/B has been as high as 1.02 and as low as 0.62, with a median of 0.87.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. UFCS has a P/S ratio of 0.97. This compares to its industry's average P/S of 1.34.

Finally, investors will want to recognize that UFCS has a P/CF ratio of 7.83. 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. UFCS's P/CF compares to its industry's average P/CF of 10.21. UFCS's P/CF has been as high as 13.42 and as low as 6.53, with a median of 9.51, all within the past year.

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

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United Fire Group, Inc (UFCS): Free Stock Analysis Report

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

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