Investors interested in Insurance - Property and Casualty stocks are likely familiar with Chubb (CB) and Cincinnati Financial (CINF). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
Chubb has a Zacks Rank of #2 (Buy), while Cincinnati Financial has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CB has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
CB currently has a forward P/E ratio of 12.44, while CINF has a forward P/E of 23.69. We also note that CB has a PEG ratio of 2.84. 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. CINF currently has a PEG ratio of 4.46.
Another notable valuation metric for CB is its P/B ratio of 1.48. 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 1.68.
These metrics, and several others, help CB earn a Value grade of B, while CINF has been given a Value grade of C.
CB sticks out from CINF in both our Zacks Rank and Style Scores models, so value investors will likely feel that CB is the better option right now.
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Chubb Limited (CB): Free Stock Analysis Report Cincinnati Financial Corporation (CINF): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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