Investors interested in Insurance - Property and Casualty stocks are likely familiar with American Financial Group (AFG) and W.R. Berkley (WRB). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Both American Financial Group and W.R. Berkley have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
AFG currently has a forward P/E ratio of 11.46, while WRB has a forward P/E of 23.56. We also note that AFG has a PEG ratio of 1.87. 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. WRB currently has a PEG ratio of 2.62.
Another notable valuation metric for AFG is its P/B ratio of 1.57. 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. For comparison, WRB has a P/B of 2.02.
Based on these metrics and many more, AFG holds a Value grade of B, while WRB has a Value grade of D.
Both AFG and WRB are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AFG is the superior value option right now.
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American Financial Group, Inc. (AFG): Free Stock Analysis Report
W.R. Berkley Corporation (WRB): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.