Three PEG Ratio Value Picks Worth Watching for 2026

The investment landscape has been shifting noticeably. After a decade dominated by growth-focused strategies and technology stocks, value investing is making a comeback. Recent performance indicates capital is flowing toward traditionally undervalued sectors like financials and healthcare, which offer more balanced valuations relative to their earnings streams.

Why the Timing Favors Value Stocks

As interest rates normalize away from historical lows, the mathematical advantage that once supported sky-high growth valuations has eroded. Companies trading at premium multiples struggle when discount rates rise. Value stocks, by contrast—typically purchased at lower price-to-earnings multiples, generating solid current earnings, and often paying dividends—tend to weather rate increases and economic moderation more effectively.

The Vanguard Growth ETF once vastly outpaced value alternatives. Yet 2025 data shows the Morningstar US Value Index gaining ground while the US Growth Index faltered in November. This momentum suggests 2026 could reward disciplined value selection.

Beyond Simple Metrics: The PEG Ratio Advantage

Value investing relies on familiar measures like dividend yield and P/E ratios. These tools identify discounted prices but have a critical flaw: they ignore growth prospects. A stock may trade cheaply because its earnings are declining—what investors call a “value trap.” By the time this becomes obvious, the shares have often fallen much further.

Warren Buffett recommends focusing on a company’s earnings growth trajectory. This is where the PEG ratio becomes invaluable. Defined as (Price/Earnings) divided by Earnings Growth Rate, the PEG ratio reveals whether a stock’s valuation is justified by its expansion potential. A low PEG suggests the market hasn’t fully priced in the company’s growth.

Screening Criteria for Quality Value Picks

Our approach combines PEG analysis with additional filters:

• PEG ratio below industry median (ensures true value pricing)
• P/E ratio below industry median (confirms near-term attractiveness)
• Zacks Rank #1 or #2 (stocks ranked #1 or #2 have historically outperformed regardless of market conditions)
• Market cap exceeding $1 billion (ensures liquidity)
• 20-day average trading volume above 50,000 shares (confirms ease of entry and exit)
• Positive earnings estimate revisions over 4 weeks (signals growing analyst optimism)
• Value Score of A or B (indicates true value characteristics)

Three Compelling Opportunities

Centerra Gold (CGAU) operates the Mount Milligan gold-copper mine in British Columbia and the Oksut gold mine in Turkey, plus molybdenum exploration activities across North America and other regions. The stock carries a Zacks Rank #1 designation and a Value Score of B. Its five-year expected earnings growth rate stands at an impressive 27.4%, suggesting substantial upside if market multiples expand.

Commercial Metals Company (CMC) manufactures and recycles steel and metal products through seven electric arc furnace mini mills, two micro mills, fabrication plants, and processing facilities in the US and Poland. Based in Irving, Texas, CMC holds a Zacks Rank #1 and Value Score of B, with a forecasted five-year growth rate of 25.6%—indicating significant expansion ahead.

Symrise (SYIEY) supplies fragrances, flavors, cosmetic and functional ingredients to global markets. Operating through Taste, Nutrition & Health and Scent & Care segments, the company produces food and beverage solutions, natural ingredients, pet feed, and probiotics. SYIEY earned a Zacks Rank #2 and Value Score of A, paired with a projected five-year growth rate of 14.9%.

The Bottom Line

The convergence of rising rates, analyst optimism, and strong fundamentals creates an environment where PEG ratio analysis—combined with robust earnings growth—can identify stocks poised to deliver meaningful returns in 2026. These three names exemplify that opportunity.