Investors with an interest in Insurance - Multi line stocks have likely encountered both Axa Sa (AXAHY) and Goosehead Insurance (GSHD). 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Axa Sa has a Zacks Rank of #2 (Buy), while Goosehead Insurance has a Zacks Rank of #3 (Hold) right now. This means that AXAHY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
AXAHY currently has a forward P/E ratio of 9.64, while GSHD has a forward P/E of 64.24. We also note that AXAHY has a PEG ratio of 1.62. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. GSHD currently has a PEG ratio of 4.58.
Another notable valuation metric for AXAHY is its P/B ratio of 1.85. 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, GSHD has a P/B of 115.34.
Based on these metrics and many more, AXAHY holds a Value grade of B, while GSHD has a Value grade of F.
AXAHY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that AXAHY is likely the superior value option right now.
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Axa Sa (AXAHY): Free Stock Analysis Report Goosehead Insurance (GSHD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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