Investors interested in Insurance - Multi line stocks are likely familiar with Aegon NV (AEG) and Zurich Insurance Group Ltd. (ZURVY). 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.
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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Aegon NV is sporting a Zacks Rank of #2 (Buy), while Zurich Insurance Group Ltd. has a Zacks Rank of #3 (Hold). This means that AEG'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 analyze a variety of traditional, tried-and-true metrics to help find companies 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.
AEG currently has a forward P/E ratio of 7.29, while ZURVY has a forward P/E of 10.95. We also note that AEG has a PEG ratio of 0.25. 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. ZURVY currently has a PEG ratio of 1.17.
Another notable valuation metric for AEG is its P/B ratio of 1.49. 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 3.9.
These metrics, and several others, help AEG earn a Value grade of B, while ZURVY has been given a Value grade of C.
AEG 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 AEG is likely 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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