Investors looking for stocks in the Insurance - Property and Casualty sector might want to consider either Progressive (PGR) or Kinsale Capital Group, Inc. (KNSL). But which of these two companies is the best option for those looking for undervalued stocks? 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Progressive has a Zacks Rank of #2 (Buy), while Kinsale Capital Group, Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that PGR likely has seen a stronger improvement to its earnings outlook than KNSL has recently. But this is only part of the picture 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.
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.
PGR currently has a forward P/E ratio of 13.79, while KNSL has a forward P/E of 24.49. We also note that PGR has a PEG ratio of 1.44. 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. KNSL currently has a PEG ratio of 1.65.
Another notable valuation metric for PGR is its P/B ratio of 4.33. 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, KNSL has a P/B of 6.01.
These are just a few of the metrics contributing to PGR's Value grade of B and KNSL's Value grade of D.
PGR has seen stronger estimate revision activity and sports more attractive valuation metrics than KNSL, so it seems like value investors will conclude that PGR is the superior option right now.
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The Progressive Corporation (PGR): Free Stock Analysis Report Kinsale Capital Group, Inc. (KNSL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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