Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 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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3 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 3 undervalued stocks in the Insurance - Life & Health industry for Wednesday, April 03, 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.

Aegon NV (ADR)’s Value Grade

Value Grade:

Aegon Ltd. (Aegon) is an international financial service holding company. The Company offers products and services across insurance, long-term savings, banking and asset management. In the United States, the Company operates under two brands: Transamerica and World Financial Group Insurance Agency, which offers life insurance, investments and retirement solutions. In the Netherlands, Aegon focuses on life insurance, long-term savings, pension and annuity solutions, and mortgages. In the United Kingdom, Aegon is the investment platform, providing a range of investment, retirement solutions, and protection products to individuals, advisers, and employers. In China, the Company owns a stake in Aegon THTF Life Insurance Company, which offers life insurance solutions through a network of branches, primarily in eastern China. It also has a partnership with Banco Santander to distribute life, health, and non-life insurance products through the bank’s branches in Spain and Portugal.

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.

Aegon NV (ADR) has a Value Score of 97, which is considered to be undervalued.

When you look at Aegon NV (ADR)’s price-to-sales ratio at 0.52 compared to the industry median at 0.95, this company has a lower price relative to revenue compared to its peers. This could make Aegon NV (ADR)’s stock more attractive for value investors.

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. Aegon NV (ADR)’s shareholder yield is higher than its industry median ratio of 4.71%. 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. Aegon NV (ADR)’s price-to-book ratio is lower than its industry median ratio of 1.48. This could make Aegon NV (ADR) more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Aegon NV (ADR)’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Aegon NV (ADR)’s price-to-free-cash-flow ratio is lower than its industry median ratio of 8.52. This could make Aegon NV (ADR) more attractive because the lower P/FCF ratio indicates that Aegon NV (ADR) 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.

American Equity Investment Life Holding’s Value Grade

Value Grade:

American Equity Investment Life Holding Company is an issuer of fixed index annuities. The Company’s policyholders work with over 40,000 independent agents and advisors affiliated with independent market organizations (IMOs), banks and broker-dealers through its wholly owned subsidiaries. Advisors and agents choose one of its annuity products suited for their client’s personal needs. The Company issues fixed annuity products through its wholly owned life insurance subsidiaries, American Equity Investment Life Insurance Company (American Equity Life), American Equity Investment Life Insurance Company of New York and Eagle Life Insurance Company. The Company operates through one segment, which consists of the sale of fixed index and fixed rate annuities. Its product types include fixed index annuities, annual reset fixed rate annuities, multi-year fixed rate annuities and single premium immediate annuities. It markets its products through a variable cost distribution network.

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.

American Equity Investment Life Holding has a Value Score of 78, which is considered to be undervalued.

American Equity Investment Life Holding’s price-earnings ratio is 26.1 compared to the industry median at 13.8. This means that it has a higher price relative to its earnings compared to its peers. This makes American Equity Investment Life Holding less attractive for value investors.

American Equity Investment Life Holding’s price-to-book ratio is lower than its peers. This could make American Equity Investment Life Holding fairly attractive for value investors when compared to the industry median at 1.48.

You can read more about American Equity Investment Life Holding’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.

National Western Life Group Inc’s Value Grade

Value Grade:

National Western Life Group, Inc. is the holding company of National Western Life Insurance Company (National Western). National Western is a stock life insurance company, which offers a portfolio of individual whole life, universal life and term insurance plans, and annuities, including supplementary riders. National Western’s life product offerings include universal life insurance (UL), interest-sensitive whole life and traditional products such as term insurance coverage. In Domestic Insurance Operations, National Western is licensed to do business in all the United States (except New York) and the District of Columbia. National Western’s products marketed are annuities, universal life insurance, and traditional life insurance, which include both term and whole life products. In International Insurance Operations, National Western's international operations consist solely of a closed block of in-force policies.

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.

National Western Life Group Inc has a Value Score of 72, which is considered to be undervalued.

National Western Life Group Inc’s price-earnings ratio is 19.0 compared to the industry median at 13.8. This means that it has a higher price relative to its earnings compared to its peers. This makes National Western Life Group Inc less attractive for value investors.

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

You can read more about National Western Life Group 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 3 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.

• Aegon NV (ADR) stock has a Value Grade of A.
• American Equity Investment Life Holding stock has a Value Grade of B.
• National Western Life Group Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 3 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.

• 3 Undervalued Insurance - Life & Health Stocks for Wednesday, April 03
• Why Oscar Health Inc’s (OSCR) Stock Is Down 5.17%
• Why Trupanion Inc’s (TRUP) Stock Is Down 4.53%
• 3 Undervalued Insurance - Life & Health Stocks for Friday, March 29

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.