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 - 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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4 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 4 undervalued stocks in the Insurance - Life & Health industry for Monday, March 13, 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.

American Equity Investment Life Holding’s Value Grade

Value Grade:

American Equity Investment Life Holding Company is engaged in the development and sale of fixed index and fixed rate annuity products. The Company issues fixed annuity products through its life insurance subsidiaries, American Equity Investment Life Insurance Company (American Equity Life), American Equity Investment Life Insurance Company of New York (American Equity Life of New York) and Eagle Life Insurance Company (Eagle Life). Its product types include fixed index annuities, annual reset fixed rate annuities, multi-year fixed-rate annuities and single premium immediate annuities. The Company markets its products through a variable cost distribution network, including independent agents through independent marketing organizations (IMOs), broker/dealers, banks and registered investment advisors. Its financing receivables consist of three mortgage loan portfolio segments: commercial mortgage loans, agricultural mortgage loans and residential mortgage loans.

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.

American Equity Investment Life Holding has a Value Score of 95, which is considered to be undervalued.

When you look at American Equity Investment Life Holding’s price-to-sales ratio at 2.26 compared to the industry median at 1.01, this company has a higher price relative to revenue compared to its peers. This could make American Equity Investment Life Holding’s stock less attractive for value investors.

American Equity Investment Life Holding’s price-earnings ratio is 3.01 compared to the industry median at 8.51. This means it has a lower share price relative to earnings compared to its peers. This could make American Equity Investment Life Holding 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. American Equity Investment Life Holding’s shareholder yield is higher than its industry median ratio of 4.64%. 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. American Equity Investment Life Holding’s price-to-book ratio is lower than its industry median ratio of 1.39. This could make American Equity Investment Life Holding more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at American Equity Investment Life Holding’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. American Equity Investment Life Holding’s price-to-free-cash-flow ratio is lower than its industry median ratio of 3.76. This could make American Equity Investment Life Holding more attractive because the lower P/FCF ratio indicates that American Equity Investment Life Holding 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.

Axa SA (ADR)’s Value Grade

Value Grade:

AXA SA (AXA) is a France-based holding company engaged in the business of financial protection. AXA offers a broad range of products through business segments: Life & Savings, Property & Casualty, Health, Asset Management, and Banking. Its offering covers motor, household, property and general liability insurance, banking, savings vehicles, and other investment-based products for both Personal/Individual and Commercial/Group customers, as well as health, protection, and retirement products for individual or professional customers. AXA operates in seven geographical segments: France, Europe, Asia, AXA XL, the United States, International and Transversal & Central Holdings. AXA SA is the holding company of AXA Group.

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.

Axa SA (ADR) has a Value Score of 93, which is considered to be undervalued.

Axa SA (ADR)’s price-earnings ratio is 9.5 compared to the industry median at 8.5. This means that it has a higher price relative to its earnings compared to its peers. This makes Axa SA (ADR) less attractive for value investors.

Axa SA (ADR)’s price-to-book ratio is higher than its peers. This could make Axa SA (ADR) less attractive for value investors when compared to the industry median at 1.39.

You can read more about Axa SA (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.

CNO Financial Group Inc’s Value Grade

Value Grade:

CNO Financial Group, Inc. is a holding company for a group of insurance companies operating throughout the United States. It develops, markets and administers health insurance, annuity, individual life insurance and other insurance and financial service products. It provides life and health insurance, annuities, financial services, and workforce benefits solutions through its family of brands, including Bankers Life, Colonial Penn, Optavise, and Washington National. Its Consumer Division serves individual consumers, engaging with them on the phone, virtually, online, face-to-face with agents, or through a combination of sales channels. Its Worksite Division focuses on worksite and group sales for businesses, associations, and other membership groups, interacting with customers at their place of employment and virtually. The Consumer and Worksite Divisions are primarily focused on marketing insurance products. It also focused on serving middle-income pre-retiree and retired Americans.

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.

CNO Financial Group Inc has a Value Score of 90, which is considered to be undervalued.

CNO Financial Group Inc’s price-earnings ratio is 6.8 compared to the industry median at 8.5. This means that it has a lower price relative to its earnings compared to its peers. This makes CNO Financial Group Inc more attractive for value investors.

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

You can read more about CNO Financial 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.

Corebridge Financial Inc’s Value Grade

Value Grade:

Corebridge Financial Inc is a provider of retirement solutions and insurance products in the United States committed to helping individuals plan, save for, and achieve secure financial futures. It operates through five segments: Individual Retirement, Group Retirement, Life Insurance, Institutional Markets, and Corporate and Other. Individual Retirement consists of fixed annuities, fixed index annuities, variable annuities, and retail mutual funds. Group Retirement consists of record-keeping, plan administration and compliance services, financial planning and advisory solutions offered in-plan, along with proprietary and non-proprietary annuities, advisory and brokerage products offered out-of-plan. Life Insurance includes products in the United States including term life and universal life insurance. Institutional Markets consist of stable value wraps (SVW) products, structured settlement and pension risk transfer (PRT) annuities, corporate- and bank-owned life insurance, high net worth products, and guaranteed investment contracts (GICs).

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.

Corebridge Financial Inc has a Value Score of 97, which is considered to be undervalued.

Corebridge Financial Inc’s price-earnings ratio is 1.0 compared to the industry median at 8.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Corebridge Financial Inc more attractive for value investors.

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

You can read more about Corebridge Financial 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 - 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 4 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.

• American Equity Investment Life Holding stock has a Value Grade of A.
• Axa SA (ADR) stock has a Value Grade of A.
• CNO Financial Group Inc stock has a Value Grade of A.
• Corebridge Financial Inc stock has a Value Grade of A.

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

• 4 Undervalued Insurance - Life & Health Stocks for Monday, March 13
• 4 Undervalued Insurance - Life & Health Stocks for Friday, March 10
• Why F&G; Annuities & Life Inc’s (FG) Stock Is Down 6.87%
• Why Lincoln National Corp’s (LNC) Stock Is Down 6.14%

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