Investors interested in stocks from the Insurance - Life Insurance sector have probably already heard of NN Group NV Unsponsored ADR (NNGRY) and The Baldwin Insurance Group (BWIN). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Both NN Group NV Unsponsored ADR and The Baldwin Insurance Group have a Zacks Rank of #2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
NNGRY currently has a forward P/E ratio of 8.52, while BWIN has a forward P/E of 17.47. We also note that NNGRY has a PEG ratio of 0.78. 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. BWIN currently has a PEG ratio of 0.93.
Another notable valuation metric for NNGRY is its P/B ratio of 0.81. 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, BWIN has a P/B of 3.47.
These metrics, and several others, help NNGRY earn a Value grade of B, while BWIN has been given a Value grade of D.
Both NNGRY and BWIN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that NNGRY is the superior value option right now.
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NN Group NV Unsponsored ADR (NNGRY): Free Stock Analysis Report Baldwin Insurance Group, Inc. (BWIN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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