5 Low Price-to-Book Stocks That Should Be in Your Portfolio Now

Core Insights - The Price-to-Book (P/B) ratio is a valuation metric that compares a company's market capitalization to its book value, helping investors identify undervalued stocks with strong fundamentals [1][2][6] - The P/B ratio is particularly useful in value investing, where investors seek stocks that are cheap yet fundamentally strong [1][10] - A P/B ratio of less than one indicates that a stock is trading below its book value, suggesting it may be undervalued, while a ratio above one may indicate overvaluation [6][8] Understanding Book Value - Book value represents the total value remaining for shareholders if a company were to liquidate its assets after settling all liabilities [4][5] - It is calculated by subtracting total liabilities from total assets, often equating to common stockholders' equity [5] P/B Ratio Analysis - The P/B ratio is calculated as market capitalization divided by book value of equity, providing insight into whether a stock is under- or overvalued [2][6] - Stocks with low P/B ratios and strong projected earnings growth are considered attractive investment opportunities [10][16] Screening Parameters for Investment - Stocks should have a P/B ratio lower than the industry median, a P/S ratio below the industry average, and a P/E ratio using F(1) estimates that is also lower than the industry median [12][13] - A PEG ratio of less than 1 indicates that a stock is undervalued relative to its growth prospects, while a minimum trading price of $5 and a substantial average trading volume are also recommended [14][15] Notable Stocks with Low P/B Ratios - CVS Health (CVS) has a projected 3-5 year EPS growth rate of 11.4% and holds a Zacks Rank of 2 with a Value Score of A [16] - Signet Jewelers (SIG) has a projected EPS growth rate of 12.2% and also holds a Zacks Rank of 2 with a Value Score of A [17] - KB Financial Group (KB) has a projected EPS growth rate of 12.33% and a Zacks Rank of 2 with a Value Score of B [18] - Affiliated Managers Group (AMG) has a projected EPS growth rate of 14.2% and a Zacks Rank of 2 with a Value Score of A [19] - PagSeguro Digital (PAGS) has a projected EPS growth rate of 11.3% and holds a Zacks Rank of 1 with a Value Score of A [21]