Investors with an interest in Insurance - Property and Casualty stocks have likely encountered both Tokio Marine Holdings Inc. (TKOMY) and Kinsale Capital Group, Inc. (KNSL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Tokio Marine Holdings Inc. and Kinsale Capital Group, Inc. are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TKOMY is likely seeing its earnings outlook improve to a greater extent. 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
TKOMY currently has a forward P/E ratio of 9.51, while KNSL has a forward P/E of 24.48. We also note that TKOMY has a PEG ratio of 0.54. 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. KNSL currently has a PEG ratio of 1.63.
Another notable valuation metric for TKOMY is its P/B ratio of 1.84. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, KNSL has a P/B of 7.21.
These are just a few of the metrics contributing to TKOMY's Value grade of B and KNSL's Value grade of D.
TKOMY has seen stronger estimate revision activity and sports more attractive valuation metrics than KNSL, so it seems like value investors will conclude that TKOMY is the superior option right now.
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