Investors interested in Insurance - Property and Casualty stocks are likely familiar with NMI Holdings (NMIH) and Kinsale Capital Group, Inc. (KNSL). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
NMI Holdings and Kinsale Capital Group, Inc. are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that NMIH's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.
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.
NMIH currently has a forward P/E ratio of 7.85, while KNSL has a forward P/E of 18.42. We also note that NMIH has a PEG ratio of 1.11. 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. KNSL currently has a PEG ratio of 1.55.
Another notable valuation metric for NMIH is its P/B ratio of 1.19. 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, KNSL has a P/B of 4.47.
Based on these metrics and many more, NMIH holds a Value grade of A, while KNSL has a Value grade of C.
NMIH stands above KNSL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NMIH is the superior value option right now.
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NMI Holdings Inc (NMIH): 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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