Investors interested in Insurance - Property and Casualty stocks are likely familiar with Allstate (ALL) 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.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Allstate has a Zacks Rank of #2 (Buy), while Kinsale Capital Group, Inc. has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ALL 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 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ALL currently has a forward P/E ratio of 11.06, while KNSL has a forward P/E of 27.37. We also note that ALL has a PEG ratio of 1.05. 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 1.80.
Another notable valuation metric for ALL is its P/B ratio of 2.66. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, KNSL has a P/B of 7.13.
These metrics, and several others, help ALL earn a Value grade of A, while KNSL has been given a Value grade of D.
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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
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).
Zacks Investment Research
