Investors looking for stocks in the Insurance - Property and Casualty sector might want to consider either Allstate (ALL) or 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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.
Allstate and W.R. Berkley are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ALL has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
ALL currently has a forward P/E ratio of 7.43, while WRB has a forward P/E of 18.19. We also note that ALL has a PEG ratio of 0.39. 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 2.96.
Another notable valuation metric for ALL is its P/B ratio of 2.16. 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 3.
These metrics, and several others, help ALL earn a Value grade of A, while WRB has been given a Value grade of C.
ALL sticks out from WRB in both our Zacks Rank and Style Scores models, so value investors will likely feel that ALL is the better option right now.
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See This Stock Now for Free >>The Allstate Corporation (ALL) : Free Stock Analysis Report
W.R. Berkley Corporation (WRB) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
