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

Investors interested in stocks from the Insurance - Property and Casualty sector have probably already heard of Axis Capital (AXS) and Chubb (CB). 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 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.

Axis Capital and Chubb 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 AXS is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

AXS currently has a forward P/E ratio of 8.59, while CB has a forward P/E of 13.37. We also note that AXS has a PEG ratio of 2.35. 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. CB currently has a PEG ratio of 3.15.

Another notable valuation metric for AXS is its P/B ratio of 1.43. 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, CB has a P/B of 1.60.

These metrics, and several others, help AXS earn a Value grade of A, while CB has been given a Value grade of C.

AXS sticks out from CB in both our Zacks Rank and Style Scores models, so value investors will likely feel that AXS is the better option right now.

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

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