Should Value Investors Buy CNA Financial (CNA) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
CNA Financial (CNA) is a stock many investors are watching right now. CNA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.
Investors should also note that CNA holds a PEG ratio of 1.71. 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. CNA's industry currently sports an average PEG of 2.45. Within the past year, CNA's PEG has been as high as 2.33 and as low as 1.67, with a median of 1.82.
Another valuation metric that we should highlight is CNA's P/B ratio of 1.27. 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. CNA's current P/B looks attractive when compared to its industry's average P/B of 1.44. Over the past 12 months, CNA's P/B has been as high as 1.43 and as low as 1.13, with a median of 1.25.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. CNA has a P/S ratio of 0.85. This compares to its industry's average P/S of 0.98.
If you're looking for another solid Insurance - Property and Casualty value stock, take a look at NMI (NMIH). NMIH is a # 2 (Buy) stock with a Value score of A.
Shares of NMI are currently trading at a forward earnings multiple of 6.95 and a PEG ratio of 0.66 compared to its industry's P/E and PEG ratios of 26.06 and 2.45, respectively.
Over the last 12 months, NMIH's P/E has been as high as 7.78, as low as 5.30, with a median of 6.63, and its PEG ratio has been as high as 0.69, as low as 0.63, with a median of 0.65.
NMI sports a P/B ratio of 1.27 as well; this compares to its industry's price-to-book ratio of 1.44. In the past 52 weeks, NMIH's P/B has been as high as 1.40, as low as 1.04, with a median of 1.22.
These are only a few of the key metrics included in CNA Financial and NMI strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, CNA and NMIH look like an impressive value stock at the moment.
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CNA Financial Corporation (CNA) : Free Stock Analysis Report
NMI Holdings Inc (NMIH) : Free Stock Analysis Report
