Investors with an interest in Insurance - Property and Casualty stocks have likely encountered both Allstate (ALL) 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.
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 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, Allstate is sporting a Zacks Rank of #1 (Strong Buy), while RenaissanceRe has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that ALL likely has seen a stronger improvement to its earnings outlook than RNR has recently. 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.
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.
ALL currently has a forward P/E ratio of 11.14, while RNR has a forward P/E of 12.80. We also note that ALL has a PEG ratio of 1.34. 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. RNR currently has a PEG ratio of 1.35.
Another notable valuation metric for ALL is its P/B ratio of 1.58. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, RNR has a P/B of 1.60.
Based on these metrics and many more, ALL holds a Value grade of A, while RNR has a Value grade of C.
ALL 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 ALL is likely the superior value option right now.
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The Allstate Corporation (ALL) : Free Stock Analysis Report
RenaissanceRe Holdings Ltd. (RNR) : Free Stock Analysis Report
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