Investors with an interest in Insurance - Property and Casualty stocks have likely encountered both Everest Re (RE) and Selective Insurance (SIGI). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Everest Re is sporting a Zacks Rank of #2 (Buy), while Selective Insurance has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that RE has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
RE currently has a forward P/E ratio of 11.06, while SIGI has a forward P/E of 16.16. We also note that RE has a PEG ratio of 1.10. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SIGI currently has a PEG ratio of 7.28.
Another notable valuation metric for RE is its P/B ratio of 1.22. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SIGI has a P/B of 1.52.
These metrics, and several others, help RE earn a Value grade of A, while SIGI has been given a Value grade of C.
RE stands above SIGI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that RE is the superior value option right now.
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Everest Re Group, Ltd. (RE): Free Stock Analysis Report
Selective Insurance Group, Inc. (SIGI): Free Stock Analysis Report
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