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 - 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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4 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 4 undervalued stocks in the Insurance - Property & Casualty industry for Wednesday, September 04, 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.

Assured Guaranty Ltd.’s Value Grade

Value Grade:

Assured Guaranty Ltd. is a Bermuda-based holding company. Through its subsidiaries, the Company provides credit enhancement products to the United States and non-United States public finance, infrastructure and structured finance markets. The Company also participates in the asset management business through its ownership interest in Sound Point Capital Management, LP and certain of its investment management affiliates. Its segments include Insurance and Asset Management. Through its insurance subsidiaries, the Company applies its credit underwriting judgment, risk management skills and capital markets experience primarily to offer financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments. Asset management segment serves as an investment advisor to primarily collateralized loan obligations and opportunity funds, through Assured Investment Management LLC and its investment management affiliates.

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.

Assured Guaranty Ltd. has a Value Score of 65, which is considered to be undervalued.

When you look at Assured Guaranty Ltd.’s price-to-sales ratio at 5.66 compared to the industry median at 1.38, this company has a higher price relative to revenue compared to its peers. This could make Assured Guaranty Ltd.’s stock less attractive for value investors.

Assured Guaranty Ltd.’s price-earnings ratio is 6.48 compared to the industry median at 14.14. This means it has a lower share price relative to earnings compared to its peers. This could make Assured Guaranty Ltd. more attractive for value investors.

Now, let’s assess Assured Guaranty Ltd.’s EV/EBITDA ratio, also known as enterprise multiple. At 20.0, when compared to the industry median of 6.5, the company may be considered overvalued 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. Assured Guaranty Ltd.’s shareholder yield is higher than its industry median ratio of 1.47%. 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. Assured Guaranty Ltd.’s price-to-book ratio is lower than its industry median ratio of 1.54. This could make Assured Guaranty Ltd. more attractive to investors looking for a new addition to their portfolio.

Cna Financial Corp’s Value Grade

Value Grade:

CNA Financial Corporation is an insurance holding company. The Company’s segments include Specialty, Commercial and International, and Life & Group and Corporate & Other. The Specialty segment offers management and professional liability and other coverages through property and casualty products and services using a network of brokers, independent agencies and managing general underwriters. The Commercial segment works with a network of brokers and independent agents to market a range of property and casualty insurance products to all types of insureds targeting small business, construction, middle markets and other commercial customers. The International segment underwrites property and casualty coverages on a global basis through a branch operation in Canada, a European business consisting of insurance companies based in the United Kingdom and Luxembourg and Hardy, its Lloyd's syndicate. The Life & Group segment includes the results of its long-term care business that is in run-off.

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.

Cna Financial Corp has a Value Score of 87, which is considered to be undervalued.

Cna Financial Corp’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 Cna Financial Corp more attractive for value investors.

Cna Financial Corp’s price-to-book ratio is higher than its peers. This could make Cna Financial Corp less attractive for value investors when compared to the industry median at 1.54.

You can read more about Cna Financial Corp’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 84, which is considered to be undervalued.

Markel Group Inc’s price-earnings ratio is 10.3 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 Markel Group Inc more attractive for value investors.

Markel Group Inc’s price-to-book ratio is higher than its peers. This could make Markel Group Inc less attractive for value investors when compared to the industry median at 1.54.

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.

HG Holdings Inc’s Value Grade

Value Grade:

HG Holdings, Inc. is engaged in the business of providing title insurance and tile agency services. The Company's segments include title insurance, real estate, reinsurance, and management services. The title insurance segment issues title insurance policies and provides title agency services for residential and commercial real estate transactions. This segment also provides closing and/or escrow services to facilitate real estate transactions. The real estate segment is engaged in rental real estate through its equity investment in HC Realty. The management services segment, through its subsidiary, HG Managing Agency, LLC, is engaged in providing various management advisory services such as legal entity formation, licensure, regulatory approval, assumption of policies, and other general operational services. Its subsidiaries include National Consumer Title Insurance Company; National Consumer Title Group, LLC; Title Agency Ventures, LLC, and HG Managing Agency, LLC.

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.

HG Holdings Inc has a Value Score of 71, which is considered to be undervalued.

HG Holdings Inc’s price-to-book ratio is higher than its peers. This could make HG Holdings Inc less attractive for value investors when compared to the industry median at 1.54.

You can read more about HG 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.

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 4 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.

• Assured Guaranty Ltd. stock has a Value Grade of B.
• Cna Financial Corp stock has a Value Grade of A.
• Markel Group Inc stock has a Value Grade of A.
• HG Holdings Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 4 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.

• 4 Undervalued Insurance - Property & Casualty Stocks for Wednesday, September 04
• 6 Undervalued Insurance - Property & Casualty Stocks for Tuesday, September 03
• Why James River Group Holdings Ltd’s (JRVR) Stock Is Down 5.14%
• 6 Undervalued Insurance - Property & Casualty Stocks for Monday, September 02

AAII Disclaimer

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