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.

Latest Insurance - Property & Casualty Stock News

Before choosing which top Insurance - Property & Casualty 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 sub-industry of property and casualty insurance has a promising fundamental outlook. Despite some inflation in claim costs brought on by pandemics and some uncertainty regarding the size of claims resulting from the conflict in Ukraine, industry profitability is expected to increase in 2022 due to an anticipated decrease in the number of significant global catastrophe claims that have plagued most insurers in recent years. However, it's likely that these losses will force the insurance industry to release adequate extra underwriting capacity, leading to firmer rates across many lines of coverage. The state of the global and domestic economies overall, as well as how well they recover from the recession brought on by COVID19, will determine how much demand there is for specific types of insurance products, particularly those in the commercial lines sector. The sector has $989 billion in surplus (or capital) from policyholders as of September 30, 2021 (the most recent date known), which helped to fund its $701 billion written premium base. Less than a 1:1 ratio was being used by the sector to leverage its capital. The industry has "excess" capital of close to $600 billion by assuming a historical (and somewhat theoretical) benchmark 2:1 leverage of capital. Insurers will be able to take advantage of higher rates and a rise in coverage demand during an economic recovery thanks to this "extra" capital (or underwriting capacity). The S&P Property & Casualty Insurance Index increased by 8.6% year-to-date until March 18, 2022, while the S&P 1500 Index fell by 6.2%. The S&P Property & Casualty Insurance Index increased by 16% in 2021, while the S&P 1500 Index increased by 26.7%.

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, May 10, 2023. 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.

Employers Holdings Inc’s Value Grade

Value Grade:

Employers Holdings, Inc. is a holding company. The Company, through its wholly owned insurance subsidiaries, Employers Insurance Company of Nevada (EICN), Employers Compensation Insurance Company (ECIC), Employers Preferred Insurance Company (EPIC), Employers Assurance Company (EAC), and Cerity Insurance Company (CIC), is engaged in the commercial property and casualty insurance industry, specializing in workers compensation products and services. Its segments include Employers and Cerity. The Employers segment represents the traditional business offered under its EMPLOYERS brand name through its agents, including business originated from its strategic partnerships and alliances. The Cerity segment represents the business offered under its Cerity brand name, which includes its direct-to-customer business. The Company provides workers compensation insurance throughout the United States, with a concentration in California.

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.

Employers Holdings Inc has a Value Score of 70, which is considered to be undervalued.

When you look at Employers Holdings Inc’s price-to-sales ratio at 1.34 compared to the industry median at 0.99, this company has a higher price relative to revenue compared to its peers. This could make Employers Holdings Inc’s stock less attractive for value investors.

Employers Holdings Inc’s price-earnings ratio is 14.03 compared to the industry median at 14.47. This means it has a lower share price relative to earnings compared to its peers. This could make Employers Holdings Inc more attractive for value investors.

Now, let’s assess Employers Holdings Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 9.1, when compared to the industry median of 7.2, 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. Employers Holdings Inc’s shareholder yield is higher than its industry median ratio of 2.75%. 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. Employers Holdings Inc’s price-to-book ratio is lower than its industry median ratio of 1.15. This could make Employers Holdings Inc more attractive to investors looking for a new addition to their portfolio.

Fairfax Financial Holdings Ltd’s Value Grade

Value Grade:

Fairfax Financial Holdings Limited is a Canada-based holding company. The Company through its subsidiaries, is primarily engaged in property and casualty insurance and reinsurance, and the associated investment management. The Company has four segments: Property and Casualty Insurance and Reinsurance, Life insurance and Run-off, Non-insurance companies, and Corporate and Other. Property and Casualty Insurance and Reinsurance segment is comprised of North American insurers, global insurers and reinsurers, and international insurers and reinsurers. Life insurance and Run-off segment is comprised of Eurolife’s life insurance operations and U.S. Run-off, which includes TIG Insurance Company. Non-insurance companies segment is comprised of restaurants and retail, Fairfax India, Thomas Cook India, and other. Corporate and Other includes the parent entity (Fairfax Financial Holdings Limited), its subsidiary intermediate holding companies and Hamblin Watsa, an investment management company.

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.

Fairfax Financial Holdings Ltd has a Value Score of 72, which is considered to be undervalued.

Fairfax Financial Holdings Ltd’s price-earnings ratio is 23.9 compared to the industry median at 14.5. This means that it has a higher price relative to its earnings compared to its peers. This makes Fairfax Financial Holdings Ltd less attractive for value investors.

Fairfax Financial Holdings Ltd’s price-to-book ratio is higher than its peers. This could make Fairfax Financial Holdings Ltd less attractive for value investors when compared to the industry median at 1.15.

You can read more about Fairfax Financial 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.

Kingstone Companies Inc’s Value Grade

Value Grade:

Kingstone Companies, Inc. (Kingstone) offers property and casualty insurance products to individuals in New York State. The Company offers its products through its wholly owned subsidiary, Kingstone Insurance Company (KICO). KICO is a licensed property and casualty insurance company, which is offering its insurance products in New York, New Jersey, Rhode Island, Massachusetts and Connecticut. It underwrites its business utilizing industry claims databases, insurance scoring reports, physical inspection of risks and other individual risk underwriting tools. The Company writes homeowners and dwelling fire business in coastal markets. The Company's product lines include personal lines, livery physical damage, and other. Its personal lines consist of homeowners, dwelling fire, renters, equipment breakdown and service line endorsements and personal umbrella policies. It writes for-hire vehicle physical damage only policies for livery and car service vehicles and taxicabs.

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.

Kingstone Companies Inc has a Value Score of 99, which is considered to be undervalued.

Kingstone Companies Inc’s price-to-book ratio is higher than its peers. This could make Kingstone Companies Inc less attractive for value investors when compared to the industry median at 1.15.

You can read more about Kingstone Companies 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 67, which is considered to be undervalued.

Tokio Marine Holdings Inc (ADR)’s price-earnings ratio is 17.6 compared to the industry median at 14.5. 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 1.15.

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 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.

• Employers Holdings Inc stock has a Value Grade of B.
• Fairfax Financial Holdings Ltd stock has a Value Grade of B.
• Kingstone Companies Inc stock has a Value Grade of A.
• Tokio Marine Holdings Inc (ADR) 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, May 10
• 6 Undervalued Insurance - Property & Casualty Stocks for Tuesday, May 09
• Why United Fire Group Inc’s (UFCS) Stock Is Down 10.07%
• 3 Undervalued Insurance - Property & Casualty Stocks for Monday, May 08

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