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.

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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 Monday, August 05, 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.

Donegal Group Inc’s Value Grade

Value Grade:

Donegal Group Inc. (DGI) is an insurance holding company. The Company’s subsidiaries include Atlantic States Insurance Company (Atlantic States), Southern Insurance Company of Virginia (Southern), The Peninsula Insurance Company and Peninsula Indemnity Company (Peninsula), and Michigan Insurance Company. The Company, through its subsidiaries offers personal and commercial lines of property and casualty insurance to businesses and individuals in 23 Mid-Atlantic, Midwestern, New England, Southern and Southwestern regions through approximately 2,200 independent insurance agencies. It operates through three segments: investment function, commercial lines of insurance and personal lines of insurance. The commercial lines products of its insurance subsidiaries consist primarily of commercial automobile, commercial multi-peril, and workers’ compensation policies. The personal lines products of insurance subsidiaries consist primarily of homeowners and private passenger automobile 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.

Donegal Group Inc has a Value Score of 77, which is considered to be undervalued.

When you look at Donegal Group Inc’s price-to-sales ratio at 0.48 compared to the industry median at 1.36, this company has a lower price relative to revenue compared to its peers. This could make Donegal Group Inc’s stock more attractive for value investors.

Donegal Group Inc’s price-earnings ratio is 63.38 compared to the industry median at 13.60. This means it has a higher share price relative to earnings compared to its peers. This could make Donegal Group Inc less attractive for value investors.

Now, let’s assess Donegal Group Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 2.8, when compared to the industry median of 7.4, 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. Donegal Group Inc’s shareholder yield is higher than its industry median ratio of 2.03%. 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. Donegal Group Inc’s price-to-book ratio is lower than its industry median ratio of 1.39. This could make Donegal Group Inc more attractive to investors looking for a new addition to their portfolio.

Global Indemnity Group LLC’s Value Grade

Value Grade:

Global Indemnity Group, LLC provides both admitted and non-admitted specialty property and specialty casualty insurance coverages and individual policyholder coverages in the United States, and reinsurance worldwide. Its segments include Penn-America and Non-Core Operations. The Penn-America segment includes all core products which include Wholesale Commercial, Programs, Assumed Reinsurance, and the InsurTech products. The Penn-America segment distributes specialty property and casualty insurance products in the excess and surplus lines marketplace. InsurTech products are Collectibles, VacantExpress and smaller products which are distributed via the Internet. The Non-Core Operations segment represents lines of business that have been de-emphasized or are no longer being written. Non-Core Operations includes manufactured and dwelling home business, farm, ranch and equine business, specialty personal lines products, such as motorcycle, watercraft, and certain homeowners and others.

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.

Global Indemnity Group LLC has a Value Score of 95, which is considered to be undervalued.

Global Indemnity Group LLC’s price-earnings ratio is 12.4 compared to the industry median at 13.6. This means that it has a lower price relative to its earnings compared to its peers. This makes Global Indemnity Group LLC more attractive for value investors.

Global Indemnity Group LLC’s price-to-book ratio is higher than its peers. This could make Global Indemnity Group LLC less attractive for value investors when compared to the industry median at 1.39.

You can read more about Global Indemnity Group LLC’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.

HCI Group Inc’s Value Grade

Value Grade:

HCI Group, Inc. is engaged in property and casualty insurance, information technology services, insurance management, real estate and reinsurance. The Company’s segments include HCPCI insurance operations, TypTap Group, real estate operations, and corporate and other. HCPCI insurance operations segment includes property and casualty insurance, which provides various forms of residential insurance products such as homeowners insurance, fire insurance, flood insurance and wind-only insurance to homeowners, condominium owners and tenants, and reinsurance and other auxiliary operations, which operates through its subsidiary, Claddaugh Casualty Insurance Company Ltd. TypTap Group segment is engaged in the property and casualty insurance business, focusing on standalone flood and homeowners multi-peril policies, and is uses internally developed technology to collect and analyze claims and other supplemental data to generate savings and efficiency for its insurance operations.

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.

HCI Group Inc has a Value Score of 68, which is considered to be undervalued.

HCI Group Inc’s price-earnings ratio is 10.0 compared to the industry median at 13.6. This means that it has a lower price relative to its earnings compared to its peers. This makes HCI Group Inc more attractive for value investors.

HCI Group Inc’s price-to-book ratio is lower than its peers. This could make HCI Group Inc more attractive for value investors when compared to the industry median at 1.39.

You can read more about HCI 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.

James River Group Holdings Ltd’s Value Grade

Value Grade:

James River Group Holdings, Ltd. is a Bermuda-based insurance holding company that owns and operates a group of specialty insurance companies. It operates through two specialty property-casualty insurance segments: Excess and Surplus Lines and Specialty Admitted Insurance. The Excess and Surplus Lines segment offers excess and surplus commercial lines liability and property insurance in every United States state, the District of Columbia, Puerto Rico and the United States Virgin Islands through James River Insurance and its wholly owned subsidiary, James River Casualty. The Specialty Admitted Insurance segment focuses on niche classes within the standard insurance markets with a primary focus on fronting business. Through Falls Lake National and its subsidiaries, it has admitted licenses and the authority to write excess and surplus lines insurance in 50 states and the District of Columbia and distributes through a variety of sources, including program administrators and MGAs.

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.

James River Group Holdings Ltd has a Value Score of 98, which is considered to be undervalued.

James River Group Holdings Ltd’s price-earnings ratio is 4.6 compared to the industry median at 13.6. This means that it has a lower price relative to its earnings compared to its peers. This makes James River Group Holdings Ltd more attractive for value investors.

James River Group Holdings Ltd’s price-to-book ratio is higher than its peers. This could make James River Group Holdings Ltd less attractive for value investors when compared to the industry median at 1.39.

You can read more about James River Group Holdings 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.

NMI Holdings Inc’s Value Grade

Value Grade:

NMI Holdings, Inc. provides mortgage insurance (MI) through its wholly owned insurance subsidiaries, National Mortgage Insurance Corporation (NMIC) and National Mortgage Reinsurance Inc One (Re One). NMIC is its primary insurance subsidiary and is licensed to write MI coverage in all 50 states and District of Columbia (D.C.). Its subsidiary, NMI Services, Inc. (NMIS), provides outsourced loan review services to mortgage loan originators. It offers two principal types of MI coverage, primary and pool. Primary MI provides default protection on individual mortgage loans at specified coverage percentages. All its primary insurance is written on first-lien mortgage loans, with nearly all secured by owner-occupied single-family homes (defined as one-to-four family homes and condominiums). Pool insurance is generally used to provide additional credit enhancement for certain secondary market mortgage transactions. It offers outsourced loan review services to mortgage originators through NMIS.

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.

NMI Holdings Inc has a Value Score of 75, which is considered to be undervalued.

NMI Holdings Inc’s price-earnings ratio is 8.9 compared to the industry median at 13.6. This means that it has a lower price relative to its earnings compared to its peers. This makes NMI Holdings Inc more attractive for value investors.

NMI Holdings Inc’s price-to-book ratio is lower than its peers. This could make NMI Holdings Inc more attractive for value investors when compared to the industry median at 1.39.

You can read more about NMI 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 63, which is considered to be undervalued.

Tokio Marine Holdings Inc (ADR)’s price-earnings ratio is 14.0 compared to the industry median at 13.6. 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 1.39.

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.

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.

• Donegal Group Inc stock has a Value Grade of B.
• Global Indemnity Group LLC stock has a Value Grade of A.
• HCI Group Inc stock has a Value Grade of B.
• James River Group Holdings Ltd stock has a Value Grade of A.
• NMI Holdings Inc stock has a Value Grade of B.
• Tokio Marine Holdings Inc (ADR) 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 Monday, August 05
• 4 Undervalued Insurance - Property & Casualty Stocks for Friday, August 02
• What You Need to Know About Essent Group Ltd's Q2 Earnings
• 4 Undervalued Insurance - Property & Casualty Stocks for Thursday, August 01

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