Investors looking for stocks in the Insurance - Property and Casualty sector might want to consider either RenaissanceRe (RNR) or 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.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
RenaissanceRe and Kinsale Capital Group, Inc. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that RNR is likely seeing its earnings outlook improve to a greater extent. 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
RNR currently has a forward P/E ratio of 7.88, while KNSL has a forward P/E of 17.73. We also note that RNR has a PEG ratio of 0.68. 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. KNSL currently has a PEG ratio of 1.50.
Another notable valuation metric for RNR is its P/B ratio of 1.26. 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 4.28.
These metrics, and several others, help RNR earn a Value grade of A, while KNSL has been given a Value grade of C.
RNR stands above KNSL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that RNR is the superior value option right now.
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RenaissanceRe Holdings Ltd. (RNR): 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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