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 - Multiline & Brokers 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 - Multiline & Brokers 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 - Multiline & Brokers 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 - Multiline & Brokers industry for Friday, September 27, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Insurance - Multiline & Brokers 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.

Chubb Ltd’s Value Grade

Value Grade:

Chubb Limited is a Switzerland-based holding company. The Company, through its subsidiaries, provides a range of insurance and reinsurance products and services to clients around the world. Its segments include North America Commercial property and casualty (P&C;) Insurance, North America Personal P&C; Insurance, North America Agricultural Insurance, Overseas General Insurance, Global Reinsurance and Life Insurance. It offers commercial insurance products and service offerings, such as risk management programs, loss control, and engineering and complex claims management. It provides specialized insurance products to areas, such as aviation and energy. It also offers personal lines insurance coverage, including homeowners, automobile, valuables, umbrella liability and recreational marine products. In addition, it supplies personal accident, supplemental health and life insurance to individuals in select countries.

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.

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

When you look at Chubb Ltd’s price-to-sales ratio at 2.19 compared to the industry median at 1.25, this company has a higher price relative to revenue compared to its peers. This could make Chubb Ltd’s stock less attractive for value investors.

Chubb Ltd’s price-earnings ratio is 12.24 compared to the industry median at 15.75. This means it has a lower share price relative to earnings compared to its peers. This could make Chubb Ltd more attractive for value investors.

Now, let’s assess Chubb Ltd’s EV/EBITDA ratio, also known as enterprise multiple. At 11.0, when compared to the industry median of 11.0, the company may be considered fairly valued 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. Chubb Ltd’s shareholder yield is higher than its industry median ratio of 0.67%. 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. Chubb Ltd’s price-to-book ratio is higher than its industry median ratio of 1.62. This could make Chubb Ltd less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Chubb Ltd’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Chubb Ltd’s price-to-free-cash-flow ratio is lower than its industry median ratio of 14.08. This could make Chubb Ltd more attractive because the lower P/FCF ratio indicates that Chubb 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.

Hartford Financial Services Group Inc’s Value Grade

Value Grade:

The Hartford Financial Services Group, Inc. is a holding company. The Company's segments include Commercial Lines, Personal Lines, Property & Casualty Other Operations, Group Benefits and Hartford Funds. The Commercial Lines segment provides a variety of insurance products and risk management services in the United States and internationally. Personal Lines segment provides automobile, homeowners and personal umbrella coverage to individuals across the United States. The Property & Casualty Other Operations segment includes certain property and casualty operations. The Group Benefits segment provides employers and associations with group life, accident and disability coverage, along with other products and services, including voluntary benefits, and group retiree health. Hartford Funds segment offers investment products for retail and retirement accounts and provides investment management, distribution and administrative services, such as product design, implementation and oversight.

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.

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

Hartford Financial Services Group Inc’s price-earnings ratio is 12.2 compared to the industry median at 15.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Hartford Financial Services Group Inc more attractive for value investors.

Hartford Financial Services Group Inc’s price-to-book ratio is lower than its peers. This could make Hartford Financial Services Group Inc more attractive for value investors when compared to the industry median at 1.62.

You can read more about Hartford Financial Services 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.

Waterdrop Inc - ADR’s Value Grade

Value Grade:

Waterdrop Inc is an insurance company. The Company is mainly engaged in operating an independent third-party insurance platform dedicated to providing insurance and healthcare service. The Company’s main businesses are the insurance marketplace, medical crowdfunding, and mutual aid. The insurance marketplace business is collaborated with insurance carriers to offer health and life insurance products to ensure a smooth and friendly user experience throughout the process from underwriting to claim services. The medical crowdfunding business is enabled people with significant medical costs need to seek help from caring hearts through technology. Patients or their relatives or friends can initiate crowdfunding campaigns on the platform and share campaign information through social networks. Mutual aid business operates the Waterdrop Mutual Aid platform enabled participants to help one another to ease their medical cost burden.

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.

Waterdrop Inc - ADR has a Value Score of 75, which is considered to be undervalued.

Waterdrop Inc - ADR’s price-earnings ratio is 11.1 compared to the industry median at 15.7. This means that it has a lower price relative to its earnings compared to its peers. This makes Waterdrop Inc - ADR more attractive for value investors.

Waterdrop Inc - ADR’s price-to-book ratio is higher than its peers. This could make Waterdrop Inc - ADR less attractive for value investors when compared to the industry median at 1.62.

You can read more about Waterdrop 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 - Multiline & Brokers 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 - Multiline & Brokers stocks as well as other industrys.

Choosing Which of the 3 Best Insurance - Multiline & Brokers 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.

• Chubb Ltd stock has a Value Grade of B.
• Hartford Financial Services Group Inc stock has a Value Grade of A.
• Waterdrop Inc - ADR 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 - Multiline & Brokers 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 - Multiline & Brokers Stocks

Want to learn more about Insurance - Multiline & Brokers 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 - Multiline & Brokers Stocks for Friday, September 27
• 3 Undervalued Insurance - Multiline & Brokers Stocks for Wednesday, September 25
• Why Crawford & Company’s (CRD.B) Stock Is Down 5.67%
• Why Ryan Specialty Holdings Inc’s (RYAN) Stock Is Up 5.29%

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.