Investors interested in Insurance - Property and Casualty stocks are likely familiar with Everest Re (RE) and RenaissanceRe (RNR). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, both Everest Re and RenaissanceRe are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
RE currently has a forward P/E ratio of 10.22, while RNR has a forward P/E of 14.08. We also note that RE has a PEG ratio of 1.02. 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. RNR currently has a PEG ratio of 1.48.
Another notable valuation metric for RE is its P/B ratio of 1.49. 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, RNR has a P/B of 1.52.
These are just a few of the metrics contributing to RE's Value grade of A and RNR's Value grade of D.
Both RE and RNR are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that RE is the superior value option right now.
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Everest Re Group, Ltd. (RE) : Free Stock Analysis Report
RenaissanceRe Holdings Ltd. (RNR) : Free Stock Analysis Report
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