Investors with an interest in Insurance - Property and Casualty stocks have likely encountered both NMI Holdings (NMIH) and Chubb (CB). 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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Currently, NMI Holdings has a Zacks Rank of #2 (Buy), while Chubb has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that NMIH likely has seen a stronger improvement to its earnings outlook than CB has recently. 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.
NMIH currently has a forward P/E ratio of 8.01, while CB has a forward P/E of 12.01. We also note that NMIH has a PEG ratio of 1.16. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CB currently has a PEG ratio of 6.10.
Another notable valuation metric for NMIH is its P/B ratio of 1.38. 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, CB has a P/B of 1.59.
These metrics, and several others, help NMIH earn a Value grade of B, while CB has been given a Value grade of C.
NMIH has seen stronger estimate revision activity and sports more attractive valuation metrics than CB, so it seems like value investors will conclude that NMIH is the superior option right now.
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Chubb Limited (CB) : 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.
