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 Monday, June 26, 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 72, which is considered to be undervalued.

When you look at Employers Holdings Inc’s price-to-sales ratio at 1.30 compared to the industry median at 0.95, 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 13.62 compared to the industry median at 13.69. 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 7.3, 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 2.50%. 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 1.16. This could make Employers Holdings Inc more attractive to investors looking for a new addition to their portfolio.

HCI Group Inc’s Value Grade

Value Grade:

HCI Group, Inc. is engaged in property and casualty insurance, information technology services, insurance management, real estate and reinsurance. The Company operates through four segments: HCPCI insurance operations, TypTap Group, real estate operations, and corporate and other. HCPCI insurance operations segment includes property and casualty insurance, which provides various forms of residential insurance products such as homeowners insurance, fire insurance, flood insurance and wind-only insurance to homeowners, condominium owners and tenants, and reinsurance and other auxiliary operations, which operates through its subsidiary, Claddaugh Casualty Insurance Company Ltd. TypTap Group segment is engaged in the property and casualty insurance business, focusing on standalone flood and homeowners multi-peril policies, and is uses internally developed technology to collect and analyze claims and other supplemental data to generate savings and efficiency for its insurance operations.

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.

HCI Group Inc has a Value Score of 72, which is considered to be undervalued.

HCI Group Inc’s price-to-book ratio is lower than its peers. This could make HCI Group Inc more attractive for value investors when compared to the industry median at 1.16.

You can read more about HCI 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 services through its subsidiary National Consumer Title Insurance Company (NCTIC). The Company also provides title agency services through its subsidiaries National Consumer Title Group, LLC (NCTG), Title Agency Ventures, LLC (TAV), and Omega National Title Agency, LLC (Omega). Through NCTIC, the Company underwrites land title insurance for owners and mortgagees as the primary insurer. The Company operates through four segments: title insurance services, reinsurance, management services, and real estate. The Company's title insurance segment issues title insurance policies on residential and commercial property in the state of Florida. This segment also provides closing and/or escrow services to facilitate real estate transactions. The Company’s real estate segment is engaged in rental real estate through its equity investment in HC Government Realty Trust, Inc., (HC Realty).

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 91, which is considered to be undervalued.

HG Holdings Inc’s price-earnings ratio is 5.7 compared to the industry median at 13.7. This means that it has a lower price relative to its earnings compared to its peers. This makes HG Holdings Inc more attractive for value investors.

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 1.16.

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.

United Fire Group Inc’s Value Grade

Value Grade:

United Fire Group, Inc. is engaged in the business of writing property and casualty insurance through a network of independent agencies. It operates in the property and casualty insurance segment, which comprises commercial lines insurance, including surety bonds, and assumed reinsurance. Its commercial lines insurance includes other liability, construction defect losses, commercial fire and allied lines, commercial automobile and fidelity and surety. Its other liability is business insurance covering bodily injury and property damage arising from general business operations, accidents on the insured's premises and products manufactured or sold. Its commercial fire and allied lines include fire, allied lines, commercial multiple peril and inland marine. Its commercial automobile insurance covers physical damage to an insured's vehicle and liabilities to third parties. Its assumed reinsurance portfolio is comprised of contracts that provide reinsurance protection to insurance companies.

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.

United Fire Group Inc has a Value Score of 93, which is considered to be undervalued.

United Fire Group Inc’s price-to-book ratio is higher than its peers. This could make United Fire Group Inc less attractive for value investors when compared to the industry median at 1.16.

You can read more about United Fire 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.

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.
• HCI Group Inc stock has a Value Grade of B.
• HG Holdings Inc stock has a Value Grade of A.
• United Fire Group 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 - 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 Monday, June 26
• 4 Undervalued Insurance - Property & Casualty Stocks for Friday, June 23
• Why Stewart Information Services Corp’s (STC) Stock Is Down 4.39%
• 5 Undervalued Insurance - Property & Casualty Stocks for Thursday, June 22

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