RE vs. TKOMY: Which Stock Is the Better Value Option?
Investors with an interest in Insurance - Property and Casualty stocks have likely encountered both Everest Re (RE) and Tokio Marine Holdings Inc. (TKOMY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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, Everest Re is sporting a Zacks Rank of #2 (Buy), while Tokio Marine Holdings Inc. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that RE likely has seen a stronger improvement to its earnings outlook than TKOMY has recently. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
RE currently has a forward P/E ratio of 8.19, while TKOMY has a forward P/E of 47.27. We also note that RE has a PEG ratio of 0.61. 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. TKOMY currently has a PEG ratio of 15.86.
Another notable valuation metric for RE is its P/B ratio of 1.78. 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, TKOMY has a P/B of 4.84.
These are just a few of the metrics contributing to RE's Value grade of A and TKOMY's Value grade of D.
RE sticks out from TKOMY in both our Zacks Rank and Style Scores models, so value investors will likely feel that RE 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
Everest Re Group, Ltd. (RE) : Free Stock Analysis Report
Tokio Marine Holdings Inc. (TKOMY) : Free Stock Analysis Report
