Investors with an interest in Insurance - Multi line stocks have likely encountered both MetLife (MET) and Zurich Insurance Group Ltd. (ZURVY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
MetLife has a Zacks Rank of #2 (Buy), while Zurich Insurance Group Ltd. has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that MET likely has seen a stronger improvement to its earnings outlook than ZURVY has recently. 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
MET currently has a forward P/E ratio of 9.13, while ZURVY has a forward P/E of 15.15. We also note that MET has a PEG ratio of 0.64. 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. ZURVY currently has a PEG ratio of 0.94.
Another notable valuation metric for MET is its P/B ratio of 2.02. 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, ZURVY has a P/B of 3.34.
These are just a few of the metrics contributing to MET's Value grade of A and ZURVY's Value grade of C.
MET sticks out from ZURVY in both our Zacks Rank and Style Scores models, so value investors will likely feel that MET is the better option right now.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
