Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Insurance - Property & Casualty 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 - Property & Casualty 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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7 Undervalued Insurance - Property & Casualty Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Insurance - Property & Casualty industry for Monday, April 08, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Insurance - Property & Casualty 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.

Arch Capital Group Ltd.’s Value Grade

Value Grade:

Arch Capital Group Ltd. is a Bermuda-based company, which provides insurance, reinsurance and mortgage insurance through its subsidiaries. The insurance segment consists of the Company’s insurance underwriting units, which offer specialty product lines, including construction and national accounts; excess and surplus casualty; professional lines; programs; property, energy, marine and aviation; travel, accident and health; warranty and lenders solutions, and others (consisting of alternative markets, excess workers' compensation and surety business). The reinsurance segment consists of its reinsurance underwriting units, which offer specialty product lines, including casualty; marine and aviation; other specialty; property catastrophe; property excluding property catastrophe, and other (consisting of life reinsurance and other). The mortgage segment includes its United States primary mortgage insurance business, investment and services related to United States credit-risk transfer.

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.

Arch Capital Group Ltd. has a Value Score of 68, which is considered to be undervalued.

When you look at Arch Capital Group Ltd.’s price-to-sales ratio at 2.65 compared to the industry median at 1.35, this company has a higher price relative to revenue compared to its peers. This could make Arch Capital Group Ltd.’s stock less attractive for value investors.

Arch Capital Group Ltd.’s price-earnings ratio is 8.18 compared to the industry median at 14.73. This means it has a lower share price relative to earnings compared to its peers. This could make Arch Capital Group Ltd. more attractive for value investors.

Now, let’s assess Arch Capital Group Ltd.’s EV/EBITDA ratio, also known as enterprise multiple. At 5.4, when compared to the industry median of 6.4, 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. Arch Capital Group Ltd.’s shareholder yield is lower than its industry median ratio of 2.59%. 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. Arch Capital Group Ltd.’s price-to-book ratio is higher than its industry median ratio of 1.32. This could make Arch Capital Group Ltd. less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Arch Capital Group Ltd.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Arch Capital Group Ltd.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 9.95. This could make Arch Capital Group Ltd. more attractive because the lower P/FCF ratio indicates that Arch Capital Group Ltd. 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 International Group Inc’s Value Grade

Value Grade:

American International Group, Inc. (AIG) is a global insurance company. The Company provides insurance solutions that help businesses and individuals in approximately 190 countries and jurisdictions protect their assets and manage risks through AIG operations and network partners. The Company operates through three segments: General Insurance, Life and Retirement, and Other Operations. Its General Insurance segment consists of two segments: North America and International. Its Life and Retirement segment consists of four segments: Individual Retirement, Group Retirement, Life Insurance and Institutional Markets. Its North America and International segments consist of two product categories: Commercial Lines, which consists of Liability, Financial Lines, Property and Global Specialty, and Personal Insurance, which consists of Personal Lines, and Accident and Health. Its individual retirement consists of fixed annuities, fixed index annuities and variable annuities.

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 International Group Inc has a Value Score of 84, which is considered to be undervalued.

American International Group Inc’s price-earnings ratio is 15.6 compared to the industry median at 14.7. This means that it has a higher price relative to its earnings compared to its peers. This makes American International Group Inc less attractive for value investors.

American International Group Inc’s price-to-book ratio is higher than its peers. This could make American International Group Inc less attractive for value investors when compared to the industry median at 1.32.

You can read more about American International 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.

Horace Mann Educators Corporation’s Value Grade

Value Grade:

Horace Mann Educators Corporation is a financial services company focused on helping America's educators and others who serve the community. The Company's segments include Property & Casualty, Life & Retirement, Supplemental & Group Benefits, and Corporate & Other. The Property & Casualty segment's primary insurance products include private passenger auto insurance, residential home insurance, and personal umbrella insurance. The Life & Retirement segment markets 403(b) tax-qualified fixed, fixed indexed and variable annuities; the Horace Mann Retirement Advantage open architecture platform for 403(b)(7) and other defined contribution plans, and traditional term and whole life insurance products and indexed universal life (IUL) products. The Supplemental & Group Benefits segment offers employer-sponsored products including accident, critical illness, short-term disability and long-term disability, as well as worksite direct products including supplemental heart and supplemental cancer.

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.

Horace Mann Educators Corporation has a Value Score of 70, which is considered to be undervalued.

Horace Mann Educators Corporation’s price-earnings ratio is 33.0 compared to the industry median at 14.7. This means that it has a higher price relative to its earnings compared to its peers. This makes Horace Mann Educators Corporation less attractive for value investors.

Horace Mann Educators Corporation’s price-to-book ratio is lower than its peers. This could make Horace Mann Educators Corporation fairly attractive for value investors when compared to the industry median at 1.32.

You can read more about Horace Mann Educators Corporation’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.

Heritage Insurance Holdings Inc’s Value Grade

Value Grade:

Heritage Insurance Holdings, Inc. is a property and casualty insurance holding company. The Company primarily provides personal and commercial residential insurance through its insurance company subsidiaries. It is vertically integrated and controls or manages substantially all aspects of insurance underwriting, customer service, actuarial analysis, distribution and claims processing and adjusting. Its subsidiaries include Heritage Property & Casualty Insurance Company (Heritage P&C;), which provides personal and commercial residential property insurance and commercial general liability insurance; Narragansett Bay Insurance Company (NBIC), which provides personal and commercial residential property insurance, and Zephyr Insurance Company (Zephyr), which provides personal residential and wind-only property insurance in Hawaii. The Company provides personal residential insurance in approximately 14 eastern and gulf states and commercial residential insurance in three of those states.

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.

Heritage Insurance Holdings Inc has a Value Score of 85, which is considered to be undervalued.

Heritage Insurance Holdings Inc’s price-earnings ratio is 6.0 compared to the industry median at 14.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Heritage Insurance Holdings Inc more attractive for value investors.

Heritage Insurance Holdings Inc’s price-to-book ratio is lower than its peers. This could make Heritage Insurance Holdings Inc fairly attractive for value investors when compared to the industry median at 1.32.

You can read more about Heritage Insurance Holdings 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.

International General Insuranc Hldgs Ltd’s Value Grade

Value Grade:

International General Insurance Holdings Ltd is a Jordan-based commercial insurance and reinsurance company. It has a worldwide portfolio of energy, property, general aviation, construction and engineering, ports and terminals, marine cargo, marine trades, contingency, political violence, financial institutions, general third-party liability, legal expenses, reinsurance treaty business, among others. Its segments include Specialty Long-tail, Specialty Short-tail and Reinsurance. Its Specialty Long-tail segment includes casualty business, financial institutions line of business, marine liability line of business, and inherent defects insurance line of business. Its Specialty Short-tail segment includes energy, property, construction and engineering, political violence, ports and terminals, marine cargo, contingency and general aviation lines of business. Reinsurance segment includes inward reinsurance treaty 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.

International General Insuranc Hldgs Ltd has a Value Score of 95, which is considered to be undervalued.

International General Insuranc Hldgs Ltd’s price-earnings ratio is 5.8 compared to the industry median at 14.7. This means that it has a lower price relative to its earnings compared to its peers. This makes International General Insuranc Hldgs Ltd more attractive for value investors.

International General Insuranc Hldgs Ltd’s price-to-book ratio is higher than its peers. This could make International General Insuranc Hldgs Ltd less attractive for value investors when compared to the industry median at 1.32.

You can read more about International General Insuranc Hldgs Ltd’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.

Markel Group Inc’s Value Grade

Value Grade:

Markel Group Inc. is a holding company comprised of various businesses and investments. The Company's segments include Insurance, Reinsurance, Investing and Markel Ventures. Insurance segment includes all direct business and facultative reinsurance placements written on a risk-bearing basis within the Company's underwriting operations. Its insurance operations include underwriting, program services and other fronting, and Insurance-linked securities. Reinsurance segment includes all treaty reinsurance written on a risk-bearing basis within the Company's underwriting operations. Reinsurance segment product offerings are underwritten primarily by its Global Reinsurance division, which operates from platforms in the United States, Bermuda and United Kingdom. Investing segment includes all investing activities related to the Company's insurance operations. Markel Ventures segment consists of controlling interests in a diverse portfolio of businesses that operate in various industries.

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.

Markel Group Inc has a Value Score of 81, which is considered to be undervalued.

Markel Group Inc’s price-earnings ratio is 10.3 compared to the industry median at 14.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Markel Group Inc more attractive for value investors.

Markel Group Inc’s price-to-book ratio is lower than its peers. This could make Markel Group Inc more attractive for value investors when compared to the industry median at 1.32.

You can read more about Markel 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.

Radian Group Inc’s Value Grade

Value Grade:

Radian Group Inc. is a diversified mortgage and real estate services company. The Company provides mortgage insurance and other products and services to the real estate and mortgage finance industries. The Company operates through its two business segments: Mortgage and homegenius. The Company’s Mortgage segment aggregates, manages and distributes United States mortgage credit risk on behalf of mortgage lending institutions and mortgage credit investors, principally through private mortgage insurance on residential first-lien mortgage loans, and also provides other credit risk management, contract underwriting and fulfillment solutions. The Company's homegenius segment offers an array of title, real estate and technology products and services to consumers, mortgage lenders, mortgage and real estate investors, Government-sponsored enterprises (GSE) and real estate brokers and agents, and corporations for their employees.

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.

Radian Group Inc has a Value Score of 74, which is considered to be undervalued.

Radian Group Inc’s price-earnings ratio is 8.3 compared to the industry median at 14.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Radian Group Inc more attractive for value investors.

Radian Group Inc’s price-to-book ratio is higher than its peers. This could make Radian Group Inc less attractive for value investors when compared to the industry median at 1.32.

You can read more about Radian 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 - Property & Casualty 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 - Property & Casualty stocks as well as other industrys.

Choosing Which of the 7 Best Insurance - Property & Casualty 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.

• Arch Capital Group Ltd. stock has a Value Grade of B.
• American International Group Inc stock has a Value Grade of A.
• Horace Mann Educators Corporation stock has a Value Grade of B.
• Heritage Insurance Holdings Inc stock has a Value Grade of A.
• International General Insuranc Hldgs Ltd stock has a Value Grade of A.
• Markel Group Inc stock has a Value Grade of A.
• Radian Group Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 7 undervalued stocks in the Insurance - Property & Casualty 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 - Property & Casualty Stocks

Want to learn more about Insurance - Property & Casualty 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.

• 7 Undervalued Insurance - Property & Casualty Stocks for Monday, April 08
• 4 Undervalued Insurance - Property & Casualty Stocks for Friday, April 05
• Why Arch Capital Group Ltd.’s (ACGL) Stock Is Up 4.18%
• Why Roadzen Inc’s (RDZN) Stock Is Up 6.38%

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