Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 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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6 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 6 undervalued stocks in the Insurance - Property & Casualty industry for Monday, July 03, 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.

Enact Holdings Inc’s Value Grade

Value Grade:

Enact Holdings, Inc. is a private mortgage insurance company. The Company is engaged in the business of writing and assuming residential mortgage guaranty insurance. The Company operates its business through its primary insurance subsidiary, Enact Mortgage Insurance Corporation, (EMICO). The insurance protects lenders and investors against certain losses resulting from nonpayment of loans secured by mortgages, deeds of trust, or other instruments constituting a lien on residential real estate. The Company offers private mortgage insurance products predominantly insuring prime-based, individually underwritten residential mortgage loans. Its primary mortgage insurance enables borrowers to buy homes with a down payment. Its primary mortgage insurance also facilitates the sale of these low-down payment mortgage loans in the secondary mortgage market, which are sold to government-sponsored enterprises. It also performs fee-based contract underwriting services for mortgage lenders.

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.

Enact Holdings Inc has a Value Score of 76, which is considered to be undervalued.

When you look at Enact Holdings Inc’s price-to-sales ratio at 3.69 compared to the industry median at 0.99, this company has a higher price relative to revenue compared to its peers. This could make Enact Holdings Inc’s stock less attractive for value investors.

Enact Holdings Inc’s price-earnings ratio is 5.74 compared to the industry median at 14.54. This means it has a lower share price relative to earnings compared to its peers. This could make Enact Holdings Inc more attractive for value investors.

Now, let’s assess Enact Holdings Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 3.9, when compared to the industry median of 7.4, the company may be considered undervalued 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. Enact 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. Enact Holdings Inc’s price-to-book ratio is lower than its industry median ratio of 1.16. This could make Enact Holdings Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Enact Holdings Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Enact Holdings Inc’s price-to-free-cash-flow ratio is higher than its industry median ratio of 9.28. This could make Enact Holdings Inc less attractive because the higher P/FCF ratio indicates that Enact Holdings Inc 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.

Argo Group International Holdings, Ltd.’s Value Grade

Value Grade:

Argo Group International Holdings, Ltd. is an underwriter of specialty insurance products in the property and casualty market. The Company’s segments include U.S. Operations and International Operations. Its segments include four insurance services and offerings, which include Property, Liability, Professional and Specialty. The Property includes both property insurance and reinsurance products. Insurance products cover commercial properties primarily in North America with some international covers. Reinsurance covers underlying exposures located throughout the world, including the United States. The Liability includes a range of primary and excess casualty products underwritten as insurance and, to lesser extent reinsurance, for risks on both an admitted and non-admitted basis in the United States. The Professional includes various professional line products. The Specialty includes insurance coverages, such as marine and energy, accident and health and surety product offerings.

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.

Argo Group International Holdings, Ltd. has a Value Score of 84, which is considered to be undervalued.

Argo Group International Holdings, Ltd.’s price-to-book ratio is higher than its peers. This could make Argo Group International Holdings, Ltd. less attractive for value investors when compared to the industry median at 1.16.

You can read more about Argo Group International 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 100, 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 1.16.

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.

NMI Holdings Inc’s Value Grade

Value Grade:

NMI Holdings, Inc. provides mortgage insurance (MI) through its wholly owned insurance subsidiaries, National Mortgage Insurance Corporation (NMIC) and National Mortgage Reinsurance Inc One (Re One). NMIC is its primary insurance subsidiary, which provides mortgage insurance. The Company's subsidiary, NMI Services, Inc. (NMIS), provides outsourced loan review services to mortgage loan originators. The Company has issued master policies with approximately 1,875 customers, including national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, Internet-sourced lenders and other non-bank lenders. The Company offers two principal types of MI coverage, which include primary and pool. Primary MI provides default protection on individual mortgage loans at specified coverage percentages. Pool insurance is generally used to provide additional credit enhancements for certain secondary market mortgage transactions.

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.

NMI Holdings Inc has a Value Score of 75, which is considered to be undervalued.

NMI Holdings Inc’s price-earnings ratio is 7.4 compared to the industry median at 14.5. This means that it has a lower price relative to its earnings compared to its peers. This makes NMI Holdings Inc more attractive for value investors.

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

You can read more about NMI 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.

Stewart Information Services Corp’s Value Grade

Value Grade:

Stewart Information Services Corporation is a title insurance and real estate services company. The Company is engaged in offering products and services through its direct operations, the network of approved agencies, and other companies. The Company operates through three segments: title segment, real estate solutions segment, and corporate and other segment. The title segment provides services needed to transfer title to property in a real estate transaction and includes services, such as searching, abstracting, examining, closing, and insuring the condition of the title to the property. In addition, the title segment includes home and personal insurance services and digital customer engagement platform services. The real estate solutions segment primarily includes appraisal management services, online notarization, and closing services, credit and real estate information services, and search and valuation services. The Company also specializes in reverse mortgage closings.

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.

Stewart Information Services Corp has a Value Score of 72, which is considered to be undervalued.

Stewart Information Services Corp’s price-earnings ratio is 11.7 compared to the industry median at 14.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Stewart Information Services Corp more attractive for value investors.

Stewart Information Services Corp’s price-to-book ratio is higher than its peers. This could make Stewart Information Services Corp less attractive for value investors when compared to the industry median at 1.16.

You can read more about Stewart Information Services Corp’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.

Hanover Insurance Group Inc’s Value Grade

Value Grade:

The Hanover Insurance Group, Inc. is the holding company. The Company provides property and casualty insurance services. The Company operates through three segments: Core Commercial, Specialty, Personal Lines and Other. Core Commercial product suite provides agents and customers with products designed for small and mid-sized businesses. Core Commercial coverages include commercial multiple peril, workers? compensation and other core commercial. Specialty offers a comprehensive suite of products focused predominately on small to mid-sized businesses. This includes various specialized products that are organized into four distinct divisions: Professional and Executive Lines, Specialty Property & Casualty, Marine, and Surety and Other. Personal Lines coverages include Personal automobile, and Homeowners and other personal lines. The Other segment primarily includes Opus, which provides investment advisory services to affiliates.

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.

Hanover Insurance Group Inc has a Value Score of 80, which is considered to be undervalued.

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

You can read more about Hanover Insurance 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 6 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.

• Enact Holdings Inc stock has a Value Grade of B.
• Argo Group International Holdings, Ltd. stock has a Value Grade of A.
• Kingstone Companies Inc stock has a Value Grade of A.
• NMI Holdings Inc stock has a Value Grade of B.
• Stewart Information Services Corp stock has a Value Grade of B.
• Hanover Insurance Group Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 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.

• 6 Undervalued Insurance - Property & Casualty Stocks for Monday, July 03
• 6 Undervalued Insurance - Property & Casualty Stocks for Friday, June 30
• Why Investors Title Company’s (ITIC) Stock Is Up 5.64%
• 7 Undervalued Insurance - Property & Casualty Stocks for Thursday, June 29

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