Investors looking for stocks in the Insurance - Multi line sector might want to consider either Aegon NV (AEG) or Zurich Insurance Group Ltd. (ZURVY). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Aegon NV has a Zacks Rank of #2 (Buy), while Zurich Insurance Group Ltd. has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AEG is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
AEG currently has a forward P/E ratio of 7.36, while ZURVY has a forward P/E of 10.92. We also note that AEG has a PEG ratio of 0.25. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ZURVY currently has a PEG ratio of 1.17.
Another notable valuation metric for AEG is its P/B ratio of 1.5. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ZURVY has a P/B of 3.89.
These metrics, and several others, help AEG earn a Value grade of B, while ZURVY has been given a Value grade of C.
AEG stands above ZURVY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AEG is the superior value option right now.
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Aegon NV (AEG): Free Stock Analysis Report Zurich Insurance Group Ltd. (ZURVY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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