TKOMY vs. WRB: Which Stock Is the Better Value Option?

Investors interested in stocks from the Insurance - Property and Casualty sector have probably already heard of Tokio Marine Holdings Inc. (TKOMY) and W.R. Berkley (WRB). 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.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Tokio Marine Holdings Inc. is sporting a Zacks Rank of #2 (Buy), while W.R. Berkley has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TKOMY 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.

TKOMY currently has a forward P/E ratio of 10.31, while WRB has a forward P/E of 17.33. We also note that TKOMY has a PEG ratio of 0.69. 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. WRB currently has a PEG ratio of 2.53.

Another notable valuation metric for TKOMY is its P/B ratio of 2.39. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, WRB has a P/B of 3.14.

These metrics, and several others, help TKOMY earn a Value grade of B, while WRB has been given a Value grade of C.

TKOMY stands above WRB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TKOMY is the superior value option right now.

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

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