AXS or CINF: Which Is the Better Value Stock Right Now?

Investors with an interest in Insurance - Property and Casualty stocks have likely encountered both Axis Capital (AXS) and Cincinnati Financial (CINF). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Both Axis Capital and Cincinnati Financial have a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.

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.

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.

AXS currently has a forward P/E ratio of 8.08, while CINF has a forward P/E of 27.51. We also note that AXS has a PEG ratio of 1.41. 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. CINF currently has a PEG ratio of 7.91.

Another notable valuation metric for AXS is its P/B ratio of 1.35. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CINF has a P/B of 1.77.

Based on these metrics and many more, AXS holds a Value grade of B, while CINF has a Value grade of C.

Both AXS and CINF are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AXS is the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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