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AXS vs. BRK.B: Which Stock Is the Better Value Option?

Investors interested in stocks from the Insurance - Property and Casualty sector have probably already heard of Axis Capital (AXS) and Berkshire Hathaway B (BRK.B). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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

Axis Capital and Berkshire Hathaway B are both sporting a Zacks Rank of # 1 (Strong Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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 7.74, while BRK.B has a forward P/E of 19.03. We also note that AXS has a PEG ratio of 1.55. 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. BRK.B currently has a PEG ratio of 2.72.

Another notable valuation metric for AXS is its P/B ratio of 1.01. 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, BRK.B has a P/B of 1.26.

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

Both AXS and BRK.B are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AXS is the superior value option right now.


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Axis Capital Holdings Limited (AXS) : Free Stock Analysis Report
 
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
 
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