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 presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Everest Re has a Zacks Rank of #2 (Buy), while W.R. Berkley has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that RE likely has seen a stronger improvement to its earnings outlook than WRB has recently. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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 16.34, while WRB has a forward P/E of 27.15. We also note that RE has a PEG ratio of 1.57. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. WRB currently has a PEG ratio of 3.02.
Another notable valuation metric for RE is its P/B ratio of 1.11. 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 1.89.
These are just a few of the metrics contributing to RE's Value grade of A and WRB's Value grade of C.
RE 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 RE is likely the superior value 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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