Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 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.

Click the button below to learn more about A+ Investor and subscribe today.

6 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 6 undervalued stocks in the Insurance - Property & Casualty industry for Tuesday, May 07, 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.

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 90, which is considered to be undervalued.

When you look at Heritage Insurance Holdings Inc’s price-to-sales ratio at 0.30 compared to the industry median at 1.29, this company has a lower price relative to revenue compared to its peers. This could make Heritage Insurance Holdings Inc’s stock more attractive for value investors.

Heritage Insurance Holdings Inc’s price-earnings ratio is 5.02 compared to the industry median at 13.20. This means it has a lower share price relative to earnings compared to its peers. This could make Heritage Insurance Holdings Inc 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. Heritage Insurance Holdings Inc’s shareholder yield is lower than its industry median ratio of 2.24%. 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. Heritage Insurance Holdings Inc’s price-to-book ratio is lower than its industry median ratio of 1.31. This could make Heritage Insurance Holdings Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Heritage Insurance Holdings Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Heritage Insurance Holdings Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 9.35. This could make Heritage Insurance Holdings Inc more attractive because the lower P/FCF ratio indicates that Heritage Insurance Holdings Inc 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.

Investors Title Company’s Value Grade

Value Grade:

Investors Title Company is a holding company. The Company's primary business activity, and one of its segments, is the issuance of residential and commercial title insurance through Investors Title Insurance Company (ITIC) and National Investors Title Insurance Company (NITIC). Its second segment provides tax-deferred real property exchange services through its subsidiaries, Investors Title Exchange Corporation (ITEC) and Investors Title Accommodation Corporation (ITAC). It provides management services to title insurance agencies through its subsidiary, Investors Title Management Services (ITMS), and investment management and trust services to individuals and trusts. Through its two title underwriting subsidiaries, ITIC and NITIC, the Company underwrites title insurance for owners and mortgagees as a primary insurer. ITIC and NITIC offer title insurance coverage to owners and mortgagees of real estate and assume reinsurance of title insurance risks from other title insurance companies.

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.

Investors Title Company has a Value Score of 71, which is considered to be undervalued.

Investors Title Company’s price-earnings ratio is 14.1 compared to the industry median at 13.2. This means that it has a higher price relative to its earnings compared to its peers. This makes Investors Title Company less attractive for value investors.

Investors Title Company’s price-to-book ratio is higher than its peers. This could make Investors Title Company less attractive for value investors when compared to the industry median at 1.31.

You can read more about Investors Title Company’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 86, which is considered to be undervalued.

Markel Group Inc’s price-earnings ratio is 8.6 compared to the industry median at 13.2. 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 1.31.

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.

NI Holdings Inc’s Value Grade

Value Grade:

NI Holdings, Inc. is an insurance holding company. The Company is the stock holding company of Nodak Insurance Company (Nodak Insurance). Nodak Insurance is a domestic property and casualty insurance company. The Company’s segments include private passenger auto insurance, non-standard auto insurance, home and farm insurance, crop insurance, commercial insurance, and all other. The private passenger auto insurance segment writes private passenger auto insurance to provide protection against liability for bodily injury and property damage arising from automobile accidents as well as protection against loss from damage to automobiles owned by the insured. The non-standard auto insurance segment writes non-standard auto insurance. The home and farm insurance segment writes homeowners and farmowners policies. The crop insurance segment offers crop hail and multi-peril crop insurance policies. The commercial insurance segment writes commercial multi-peril 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.

NI Holdings Inc has a Value Score of 86, which is considered to be undervalued.

NI Holdings Inc’s price-to-book ratio is higher than its peers. This could make NI Holdings Inc less attractive for value investors when compared to the industry median at 1.31.

You can read more about NI 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.

Tokio Marine Holdings Inc (ADR)’s Value Grade

Value Grade:

Tokio Marine Holdings, Inc. is a Japan-based company engaged in the domestic non-life insurance business, domestic life insurance business, overseas insurance business, as well as financial and general business. The Company operates through four business segments. The Domestic Non-life Insurance segment is engaged in no-life insurance underwriting business and asset management business in Japan. The Domestic Life Insurance segment is engaged in life insurance underwriting and asset management services in Japan. The Overseas Insurance segment is engaged in overseas insurance underwriting and asset management services. The Financial and General segment is mainly engaged in the provision of investment advisory services, investment trust outsourcing services, staffing services, as well as real estate management and nursing care 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.

Tokio Marine Holdings Inc (ADR) has a Value Score of 62, which is considered to be undervalued.

Tokio Marine Holdings Inc (ADR)’s price-earnings ratio is 16.1 compared to the industry median at 13.2. This means that it has a higher price relative to its earnings compared to its peers. This makes Tokio Marine Holdings Inc (ADR) less attractive for value investors.

Tokio Marine Holdings Inc (ADR)’s price-to-book ratio is lower than its peers. This could make Tokio Marine Holdings Inc (ADR) more attractive for value investors when compared to the industry median at 1.31.

You can read more about Tokio Marine Holdings Inc (ADR)’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.

White Mountains Insurance Group Ltd’s Value Grade

Value Grade:

White Mountains Insurance Group, Ltd. is a financial service holding company. The Company is engaged in the acquisition of businesses and assets in the insurance, financial services, and related sectors, operating these businesses and assets through its subsidiaries and disposing of these businesses and assets. The Company’s segments include HG Global/BAM, Ark/WM Outrigger and Kudu. The Company conducts its business primarily in four areas: municipal bond insurance, property and casualty insurance and reinsurance, capital solutions for asset and wealth management firms and other operations. Its municipal bond insurance business is conducted through its subsidiary HG Global Ltd. Its property and casualty insurance and reinsurance business are conducted through its subsidiary Ark Insurance Holdings Limited and its subsidiaries. The Company, through its subsidiary, Kudu Investment Management, LLC, and its subsidiaries, provides capital solutions for asset and wealth management firms.

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.

White Mountains Insurance Group Ltd has a Value Score of 76, which is considered to be undervalued.

White Mountains Insurance Group Ltd’s price-earnings ratio is 9.3 compared to the industry median at 13.2. This means that it has a lower price relative to its earnings compared to its peers. This makes White Mountains Insurance Group Ltd more attractive for value investors.

White Mountains Insurance Group Ltd’s price-to-book ratio is higher than its peers. This could make White Mountains Insurance Group Ltd less attractive for value investors when compared to the industry median at 1.31.

You can read more about White Mountains Insurance Group 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.

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 6 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.

• Heritage Insurance Holdings Inc stock has a Value Grade of A.
• Investors Title Company stock has a Value Grade of B.
• Markel Group Inc stock has a Value Grade of A.
• NI Holdings Inc stock has a Value Grade of A.
• Tokio Marine Holdings Inc (ADR) stock has a Value Grade of B.
• White Mountains Insurance Group Ltd stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 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.

• 6 Undervalued Insurance - Property & Casualty Stocks for Tuesday, May 07
• Which Is a Better Investment, Kinsale Capital Group Inc or Palomar Holdings Inc Stock?
• 4 Undervalued Insurance - Property & Casualty Stocks for Monday, May 06
• 6 Undervalued Insurance - Property & Casualty Stocks for Friday, May 03

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.