U.S. Markets closed

TRV vs. WRB: Which Stock Is the Better Value Option?

  • Oops!
    Something went wrong.
    Please try again later.
·2 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Investors interested in stocks from the Insurance - Property and Casualty sector have probably already heard of Travelers (TRV) and W.R. Berkley (WRB). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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

Right now, Travelers is sporting a Zacks Rank of #2 (Buy), while W.R. Berkley has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TRV has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

TRV currently has a forward P/E ratio of 12.85, while WRB has a forward P/E of 18.26. We also note that TRV has a PEG ratio of 1.98. 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. WRB currently has a PEG ratio of 2.03.

Another notable valuation metric for TRV is its P/B ratio of 1.38. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WRB has a P/B of 2.13.

These are just a few of the metrics contributing to TRV's Value grade of A and WRB's Value grade of C.

TRV sticks out from WRB in both our Zacks Rank and Style Scores models, so value investors will likely feel that TRV is the better option right now.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report
 
W.R. Berkley Corporation (WRB) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research