Investors looking for stocks in the Insurance - Property and Casualty sector might want to consider either CNA Financial (CNA) or Berkshire Hathaway Inc. (BRK.B). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
CNA Financial and Berkshire Hathaway Inc. are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.
CNA currently has a forward P/E ratio of 10.45, while BRK.B has a forward P/E of 21.09. We also note that CNA has a PEG ratio of 2.09. 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 3.01.
Another notable valuation metric for CNA is its P/B ratio of 1.04. 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 1.42.
Based on these metrics and many more, CNA holds a Value grade of B, while BRK.B has a Value grade of C.
Both CNA and BRK.B are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CNA is the superior value option right now.
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CNA Financial Corporation (CNA) : Free Stock Analysis Report
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