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 Thursday, August 31, 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.

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 75, which is considered to be undervalued.

When you look at Argo Group International Holdings, Ltd.’s price-to-sales ratio at 0.66 compared to the industry median at 0.98, this company has a lower price relative to revenue compared to its peers. This could make Argo Group International Holdings, Ltd.’s stock 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. Argo Group International Holdings, Ltd.’s shareholder yield is lower than its industry median ratio of 2.69%. 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. Argo Group International Holdings, Ltd.’s price-to-book ratio is lower than its industry median ratio of 1.16. This could make Argo Group International Holdings, Ltd. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Argo Group International Holdings, Ltd.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Argo Group International Holdings, Ltd.’s price-to-free-cash-flow ratio is higher than its industry median ratio of 8.67. This could make Argo Group International Holdings, Ltd. less attractive because the higher P/FCF ratio indicates that Argo Group International Holdings, Ltd. 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.

Cna Financial Corp’s Value Grade

Value Grade:

CNA Financial Corporation is an insurance holding company. The Company?s segments include Specialty, Commercial, International, Life & Group and Corporate & Other. Its Specialty provides management and professional liability and other coverages through property and casualty products and services using a network of brokers, independent agencies and managing general underwriters. Its Commercial segment works with a network of brokers and independent agents to market a range of property and casualty insurance products to all types of insureds targeting small business, construction, middle markets and other commercial customers. The International segment underwrites property and casualty coverages on a global basis through a branch operation in Canada, a European business consisting of insurance companies based in the United Kingdom and Luxembourg and Hardy, its Lloyd's syndicate. The Life & Group segment includes the results of its long-term care business that is in run-off.

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.

Cna Financial Corp has a Value Score of 87, which is considered to be undervalued.

Cna Financial Corp’s price-earnings ratio is 11.3 compared to the industry median at 11.8. This means that it has a lower price relative to its earnings compared to its peers. This makes Cna Financial Corp more attractive for value investors.

Cna Financial Corp’s price-to-book ratio is lower than its peers. This could make Cna Financial Corp fairly attractive for value investors when compared to the industry median at 1.16.

You can read more about Cna Financial 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.

Markel Group Inc’s Value Grade

Value Grade:

Markel Group Inc., formerly Markel Corporation, is engaged in providing insurance for bakery equipment, building supplies, and more. The Company?s three-engine system includes insurance, investments, and Markel Ventures. The Company operates the Markel Specialty, Markel International, and Global Reinsurance divisions, as well as State National, a portfolio protection and program services company, and Nephila, an insurance-linked securities investment manager. It manages its fixed-income investments to match the size and duration of its expected future insurance claims while producing interest income. Its Markel Ventures companies include Brahmin, Buckner Heavylift Cranes, CapTech, Costa Farms, Cottrell, Eagle, Ellicott Dredges, Havco, Lansing Building Products, Panel Specialists, Markel Food Group, Metromont, ParkLand Ventures, PartnerMD, RetailData, Rosemont Investment Group, VSC Fire & Security, and Weldship.

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.

Markel Group Inc has a Value Score of 75, which is considered to be undervalued.

Markel Group Inc’s price-earnings ratio is 10.6 compared to the industry median at 11.8. This means that it has a lower price relative to its earnings compared to its peers. This makes Markel Group Inc more attractive for value investors.

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

You can read more about Markel 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.

Universal Insurance Holdings, Inc.’s Value Grade

Value Grade:

Universal Insurance Holdings, Inc. is a holding company that offers property and casualty insurance and value-added insurance services. It develops, markets, and underwrites insurance products for consumers in the personal residential homeowners lines of business and other insurance-related services for its insurance entities, including risk management, claims management, and distribution. Its primary insurance entities include Universal Property & Casualty Insurance Company (UPCIC) and American Platinum Property and Casualty Insurance Company. UPCIC distributes policies through its independent agency force and offers various types of personal residential insurance, such as homeowners, renters/tenants, condo unit owners, and dwelling/fire. It also offers allied lines, coverage for other structures, and personal property, liability, and personal articles coverages. Through its subsidiary, Evolution Risk Advisors, Inc., it advises on actuarial issues and administers claims payments.

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.

Universal Insurance Holdings, Inc. has a Value Score of 85, which is considered to be undervalued.

Universal Insurance Holdings, Inc.’s price-earnings ratio is 71.0 compared to the industry median at 11.8. This means that it has a higher price relative to its earnings compared to its peers. This makes Universal Insurance Holdings, Inc. less attractive for value investors.

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

You can read more about Universal Insurance 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.

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.

• Argo Group International Holdings, Ltd. stock has a Value Grade of B.
• Cna Financial Corp stock has a Value Grade of A.
• Markel Group Inc stock has a Value Grade of B.
• Universal Insurance Holdings, 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 Thursday, August 31
• 7 Undervalued Insurance - Property & Casualty Stocks for Wednesday, August 30
• 6 Undervalued Insurance - Property & Casualty Stocks for Tuesday, August 29
• Why HCI Group Inc’s (HCI) Stock Is Up 4.43%

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