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 - Life & Health 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.

Latest Insurance - Life & Health Stock News

Before choosing which top Insurance - Life & Health stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The fundamental outlook on the life & health insurance industry is neutral. While interest rates have risen, they still remain below long-term historical averages, making asset/liability management challenging for this group (given the long-term nature of many of its policyholder obligations). Offsetting this trend is the recovery of the global economy in the aftermath of COVID-19. Longer-term, there are some positive demographic trends, including an aging population’s need to save for retirement and the coming of age of millennials. Against this very mixed backdrop, we think the insurance industry is at an inflection point, with many industry participants rationalizing their businesses by revamping products, raising prices (where possible), and exiting high-risk or non-strategic businesses. While we applaud this strategy, we think this revamping injects a degree of execution risk into the life insurance industry, as not every firm may be able to successfully complete such a strategy. Moreover, a flood of non-strategic assets coming to market, some from distressed sellers, will likely dampen the value of those assets.

Why Focus on Undervalued Insurance - Life & Health 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 - Life & Health 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 - Life & Health industry for Friday, March 03, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Insurance - Life & Health 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.

AFLAC Incorporated’s Value Grade

Value Grade:

Aflac Incorporated is engaged in supplemental health and life insurance company. Its insurance business is marketed and administered through American Family Life Assurance Company of Columbus (Aflac) in the United States and through Aflac Life Insurance Japan Ltd. (ALIJ) in Japan. Its segments include Aflac Japan and Aflac U.S. Aflac Japan is designed to help consumers pay for medical and non-medical costs that are not reimbursed under Japan's national health insurance system. Its insurance products include cancer, medical and income support insurance, nursing care insurance, work leave insurance, whole life, GIFT and WAYS and child endowment. It designs its United States insurance products to provide supplemental coverage for people having medical or primary insurance coverage. Aflac U.S. products are distributed in the individual and group supplemental insurance markets. It also offers insurance products, such as accident insurance, disability insurance, cancer insurance 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.

AFLAC Incorporated has a Value Score of 70, which is considered to be undervalued.

When you look at AFLAC Incorporated’s price-to-sales ratio at 2.14 compared to the industry median at 0.94, this company has a higher price relative to revenue compared to its peers. This could make AFLAC Incorporated’s stock less attractive for value investors.

AFLAC Incorporated’s price-earnings ratio is 10.30 compared to the industry median at 8.96. This means it has a higher share price relative to earnings compared to its peers. This could make AFLAC Incorporated less attractive for value investors.

Now, let’s assess AFLAC Incorporated’s EV/EBITDA ratio, also known as enterprise multiple. At 6.7, when compared to the industry median of 6.1, 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. AFLAC Incorporated’s shareholder yield is higher than its industry median ratio of 4.18%. 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. AFLAC Incorporated’s price-to-book ratio is higher than its industry median ratio of 1.64. This could make AFLAC Incorporated less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at AFLAC Incorporated’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. AFLAC Incorporated’s price-to-free-cash-flow ratio is higher than its industry median ratio of 3.89. This could make AFLAC Incorporated less attractive because the higher P/FCF ratio indicates that AFLAC Incorporated 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.

F&G; Annuities & Life Inc’s Value Grade

Value Grade:

F&G; Annuities & Life, Inc. is a provider of insurance solutions, serving retail annuity and life customers and institutional clients. The Company offers life insurance and annuity solutions to meet individual financial security needs through a national network of financial professionals. It is a provider of insurance solutions for life and retirement. The Company offers fixed annuity and life insurance products across the United States to protect and plan for future. The solutions offer valuable guarantees, from lifetime income to downside protection against market risk. Annuity helps to protect and grow a retirement nest egg or turn it into guaranteed lifetime income. Its life insurance policy provides financial protection for a family in the event of a death. The Company?s life insurance solutions include tax benefits, interest crediting options, death benefit options, and withdrawals and additional features. Its products have protected nearly 800,000 people across the United 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.

F&G; Annuities & Life Inc has a Value Score of 93, which is considered to be undervalued.

F&G; Annuities & Life Inc’s price-earnings ratio is 4.2 compared to the industry median at 9.0. This means that it has a lower price relative to its earnings compared to its peers. This makes F&G; Annuities & Life Inc more attractive for value investors.

F&G; Annuities & Life Inc’s price-to-book ratio is lower than its peers. This could make F&G; Annuities & Life Inc fairly attractive for value investors when compared to the industry median at 1.64.

You can read more about F&G; Annuities & Life 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.

Unum Group’s Value Grade

Value Grade:

Unum Group is a provider of financial protection benefits in the United States and the United Kingdom. The Company's segments include Unum US, Unum International and Colonial Life. Unum US segment is comprised of group disability, group life and accidental death and dismemberment, and supplemental and voluntary lines of business. Its disability line of business includes long-term and short-term disability, medical stop-loss, and fee-based service products. The supplemental and voluntary line of business includes individual disability, voluntary benefits, and dental and vision products. Unum International segment includes its operations in the United Kingdom (UK) and Poland. Unum UK's business includes insurance for group long-term disability, group life, and supplemental lines of business, which include dental, individual disability, and critical illness products. Unum Poland's business primarily includes insurance for individual and group life with accident and health riders

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.

Unum Group has a Value Score of 93, which is considered to be undervalued.

Unum Group’s price-earnings ratio is 6.9 compared to the industry median at 9.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Unum Group more attractive for value investors.

Unum Group’s price-to-book ratio is higher than its peers. This could make Unum Group less attractive for value investors when compared to the industry median at 1.64.

You can read more about Unum Group’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 - Life & Health 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 - Life & Health stocks as well as other industrys.

Choosing Which of the 3 Best Insurance - Life & Health 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.

• AFLAC Incorporated stock has a Value Grade of B.
• F&G; Annuities & Life Inc stock has a Value Grade of A.
• Unum Group stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Insurance - Life & Health 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 - Life & Health Stocks

Want to learn more about Insurance - Life & Health 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 - Life & Health Stocks for Friday, March 03
• 3 Undervalued Insurance - Life & Health Stocks for Thursday, March 02
• Is F&G; Annuities & Life Inc (FG) a Good Dividend Stock?
• Why Oscar Health Inc’s (OSCR) Stock Is Down 7.68%

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