Investors with an interest in Insurance - Property and Casualty stocks have likely encountered both Everest Re (RE) 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.
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.
Currently, Everest Re has a Zacks Rank of #2 (Buy), while W.R. Berkley has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that RE has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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 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 10.52, while WRB has a forward P/E of 26.06. We also note that RE has a PEG ratio of 1.05. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WRB currently has a PEG ratio of 2.90.
Another notable valuation metric for RE is its P/B ratio of 1.55. 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, WRB has a P/B of 2.23.
These are just a few of the metrics contributing to RE's Value grade of B and WRB's Value grade of D.
RE has seen stronger estimate revision activity and sports more attractive valuation metrics than WRB, so it seems like value investors will conclude that RE is the superior option right now.
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Everest Re Group, Ltd. (RE) : Free Stock Analysis Report
W.R. Berkley Corporation (WRB) : Free Stock Analysis Report
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