Investors interested in stocks from the Insurance - Property and Casualty sector have probably already heard of Allstate (ALL) and Kinsale Capital Group, Inc. (KNSL). 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.
Allstate and Kinsale Capital Group, Inc. are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ALL has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
ALL currently has a forward P/E ratio of 7.17, while KNSL has a forward P/E of 18.88. We also note that ALL has a PEG ratio of 0.38. 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. KNSL currently has a PEG ratio of 1.28.
Another notable valuation metric for ALL is its P/B ratio of 2.08. 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, KNSL has a P/B of 4.45.
These metrics, and several others, help ALL earn a Value grade of A, while KNSL has been given a Value grade of C.
ALL stands above KNSL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ALL is the superior value option right now.
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The Allstate Corporation (ALL): Free Stock Analysis Report Kinsale Capital Group, Inc. (KNSL): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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