NMIH vs. CB: Which Stock Should Value Investors Buy Now?

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 presents investors with the better value opportunity right now? Let's 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.

NMI Holdings has a Zacks Rank of #2 (Buy), while Chubb has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NMIH has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

NMIH currently has a forward P/E ratio of 7.65, while CB has a forward P/E of 12.37. We also note that NMIH has a PEG ratio of 1.11. 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. CB currently has a PEG ratio of 4.28.

Another notable valuation metric for NMIH is its P/B ratio of 1.32. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CB has a P/B of 1.66.

Based on these metrics and many more, NMIH holds a Value grade of B, while CB has a Value grade of C.

NMIH stands above CB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NMIH is the superior value option right now.

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NMI Holdings Inc (NMIH) : Free Stock Analysis Report

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.

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