Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 stocks made the list for top value stocks in the Insurance - Life & Health industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Insurance - Life & Health Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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4 Undervalued Insurance - Life & Health Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 4 undervalued stocks in the Insurance - Life & Health industry for Friday, March 22, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Insurance - Life & Health industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Atlantic American Corporation’s Value Grade

Value Grade:

Atlantic American Corporation is an insurance holding company, which operates in specialty markets within the life and health and property and casualty insurance industries. The Company conducts its operations primarily through its insurance subsidiaries: American Southern Insurance Company and American Safety Insurance Company (collectively American Southern); and Bankers Fidelity Life Insurance Company, Bankers Fidelity Assurance Company, and Atlantic Capital Life Assurance Company (collectively Bankers Fidelity). American Southern operates in the property and casualty insurance market. Bankers Fidelity operates in the life and health insurance markets. American Southern's product lines include business automobile insurance policies, general liability insurance policies, property insurance policies, and surety bonds. Products offered by Bankers Fidelity include life insurance, Medicare supplements, and other accident and health insurance products.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Atlantic American Corporation has a Value Score of 81, which is considered to be undervalued.

When you look at Atlantic American Corporation’s price-to-sales ratio at 0.31 compared to the industry median at 0.97, this company has a lower price relative to revenue compared to its peers. This could make Atlantic American Corporation’s stock more attractive for value investors.

Atlantic American Corporation’s price-earnings ratio is 21.90 compared to the industry median at 14.13. This means it has a higher share price relative to earnings compared to its peers. This could make Atlantic American Corporation less attractive for value investors.

Now, let’s assess Atlantic American Corporation’s EV/EBITDA ratio, also known as enterprise multiple. At 6.8, when compared to the industry median of 8.0, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Atlantic American Corporation’s shareholder yield is lower than its industry median ratio of 4.26%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Atlantic American Corporation’s price-to-book ratio is lower than its industry median ratio of 1.48. This could make Atlantic American Corporation more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Atlantic American Corporation’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Atlantic American Corporation’s price-to-free-cash-flow ratio is higher than its industry median ratio of 9.00. This could make Atlantic American Corporation less attractive because the higher P/FCF ratio indicates that Atlantic American Corporation is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Aflac Inc’s Value Grade

Value Grade:

Aflac Incorporated is a provider of supplemental health insurance products. The Company's insurance business is marketed and administered through Aflac Life Insurance Japan Ltd. (ALIJ) in Japan and through American Family Life Assurance Company of Columbus (Aflac), American Family Life Assurance Company of New York (Aflac New York), Continental American Insurance Company (CAIC), Tier One Insurance Company (TOIC) and Aflac Benefit Solutions, Inc. (ABS) in the United States. Its segments include Aflac Japan and Aflac U.S. Aflac Japan is designed to help consumers pay for medical and non-medical costs that are not reimbursed under Japan's national health insurance system. Its insurance products include cancer, medical and income support insurance, nursing care insurance, work leave insurance, whole life, GIFT and WAYS and child endowment. It designs its United States insurance products to provide supplemental coverage for people having medical or primary insurance coverage.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Aflac Inc has a Value Score of 62, which is considered to be undervalued.

Aflac Inc’s price-earnings ratio is 11.0 compared to the industry median at 14.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Aflac Inc more attractive for value investors.

Aflac Inc’s price-to-book ratio is lower than its peers. This could make Aflac Inc more attractive for value investors when compared to the industry median at 1.48.

You can read more about Aflac Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Manulife Financial Corp (USA)’s Value Grade

Value Grade:

Manulife Financial Corporation is a Canada-based international financial services company. The Company operates as Manulife across its offices in Asia, Canada, and Europe, and primarily as John Hancock in the United States. It provides financial advice, insurance, and wealth and asset management solutions for individuals, institutions, and retirement plan members worldwide. Its segments include Asia, Canada, Global WAM, and Corporate and Other. The Asia segment provides insurance products and insurance-based wealth accumulation products. The Canada segment provides insurance products, insurance-based wealth accumulation products, and banking services and has an in-force variable annuity business. Global WAM segment provides investment advice and solutions to its retail, retirement, and institutional clients. It provides life insurance products, insurance-based wealth accumulation products and has an in-force long-term care insurance business.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Manulife Financial Corp (USA) has a Value Score of 82, which is considered to be undervalued.

Manulife Financial Corp (USA)’s price-earnings ratio is 12.5 compared to the industry median at 14.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Manulife Financial Corp (USA) more attractive for value investors.

Manulife Financial Corp (USA)’s price-to-book ratio is lower than its peers. This could make Manulife Financial Corp (USA) fairly attractive for value investors when compared to the industry median at 1.48.

You can read more about Manulife Financial Corp (USA)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

UTG Inc’s Value Grade

Value Grade:

UTG, Inc. is an insurance holding company. The Company is engaged in the business of individual life insurance, which includes the servicing of existing insurance business in-force, the acquisition of other companies in the insurance business, and the administration and processing of life insurance business for other entities. The Company operates through its subsidiary Universal Guaranty Life Insurance Company (UG). UG's product portfolio consists of a limited number of life insurance product offerings. The Company's Tradition policy is a fixed premium whole life insurance policy. Its annuity product is a five-year, single premium product. The Company's investment real estate portfolio includes ownership in oil and gas royalties. The Company's investment portfolio consists of fixed maturities, equity securities, trading securities, mortgage loans, notes receivable, and real estate.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

UTG Inc has a Value Score of 88, which is considered to be undervalued.

UTG Inc’s price-earnings ratio is 6.1 compared to the industry median at 14.1. This means that it has a lower price relative to its earnings compared to its peers. This makes UTG Inc more attractive for value investors.

UTG Inc’s price-to-book ratio is higher than its peers. This could make UTG Inc less attractive for value investors when compared to the industry median at 1.48.

You can read more about UTG Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Insurance - Life & Health Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Insurance - Life & Health stocks as well as other industrys.

Choosing Which of the 4 Best Insurance - Life & Health Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Atlantic American Corporation stock has a Value Grade of A.
• Aflac Inc stock has a Value Grade of B.
• Manulife Financial Corp (USA) stock has a Value Grade of A.
• UTG Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 4 undervalued stocks in the Insurance - Life & Health industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Insurance - Life & Health Stocks

Want to learn more about Insurance - Life & Health stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 4 Undervalued Insurance - Life & Health Stocks for Friday, March 22
• 3 Undervalued Insurance - Life & Health Stocks for Thursday, March 21
• Why Lincoln National Corp’s (LNC) Stock Is Up 6.53%
• 3 Undervalued Insurance - Life & Health Stocks for Wednesday, March 20

AAII Disclaimer

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