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AXS vs. BRK.B: Which Stock Should Value Investors Buy Now?

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Investors interested in Insurance - Property and Casualty stocks are likely familiar with Axis Capital (AXS) and Berkshire Hathaway B (BRK.B). 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.

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.

Right now, Axis Capital is sporting a Zacks Rank of #2 (Buy), while Berkshire Hathaway B has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AXS likely has seen a stronger improvement to its earnings outlook than BRK.B has recently. 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 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.

AXS currently has a forward P/E ratio of 11.03, while BRK.B has a forward P/E of 24.28. We also note that AXS has a PEG ratio of 2.21. 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. BRK.B currently has a PEG ratio of 3.47.

Another notable valuation metric for AXS is its P/B ratio of 0.89. 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 1.36.

Based on these metrics and many more, AXS holds a Value grade of B, while BRK.B has a Value grade of C.

AXS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that AXS is likely 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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