Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 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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7 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 7 undervalued stocks in the Insurance - Property & Casualty industry for Thursday, October 19, 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.

Ambac Financial Group, Inc.’s Value Grade

Value Grade:

Ambac Financial Group, Inc. is a financial services holding company. It operates three principal businesses: Legacy Financial Guarantee (LFG) Insurance, Specialty Property and Casualty Insurance, and Insurance Distribution. The LFG Insurance includes the activities of Ambac Assurance Corporation (AAC) and its wholly owned subsidiaries, including Ambac Assurance UK Limited (Ambac UK) and Ambac Financial Services LLC (AFS). The Specialty Property and Casualty Insurance includes five admitted carriers and an excess and surplus lines (E&S; or no admitted) insurer, Everspan Indemnity Insurance Company (all carriers collectively, Everspan). The Insurance Distribution includes the specialty property and casualty (P&C;) insurance distribution business, which includes managing general agents and underwriters (collectively MGA/Us), insurance wholesalers, brokers, and other distribution businesses, which includes Xchange Benefits, LLC, a P&C; MGA specializing in accident and health products.

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.

Ambac Financial Group, Inc. has a Value Score of 86, which is considered to be undervalued.

When you look at Ambac Financial Group, Inc.’s price-to-sales ratio at 2.12 compared to the industry median at 1.02, this company has a higher price relative to revenue compared to its peers. This could make Ambac Financial Group, Inc.’s stock less attractive for value investors.

Ambac Financial Group, Inc.’s price-earnings ratio is 1.16 compared to the industry median at 12.03. This means it has a lower share price relative to earnings compared to its peers. This could make Ambac Financial Group, Inc. more attractive for value investors.

Now, let’s assess Ambac Financial Group, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 8.8, when compared to the industry median of 6.9, 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. Ambac Financial Group, Inc.’s shareholder yield is lower than its industry median ratio of 2.67%. 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. Ambac Financial Group, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.13. This could make Ambac Financial Group, Inc. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Ambac Financial Group, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Ambac Financial Group, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 8.77. This could make Ambac Financial Group, Inc. more attractive because the lower P/FCF ratio indicates that Ambac Financial Group, 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.

Cincinnati Financial Corporation’s Value Grade

Value Grade:

Cincinnati Financial Corporation is engaged in the business of property casualty insurance, which markets through independent insurance agencies in approximately 46 states. The Company operates through five segments: Commercial lines insurance, Personal lines insurance, Excess and surplus lines insurance, Life insurance, and Investments. The Commercial lines insurance segment includes five commercial business lines, such as commercial casualty, commercial property, commercial auto, workers? compensation, and other commercial lines. The Personal lines insurance segment includes three business lines, including personal auto, homeowner, and other personal lines. The Excess and surplus lines insurance segment includes commercial casualty and commercial property. The Life insurance segment includes term life insurance, worksite products, whole life insurance, and universal life insurance. The Investments segment invests in fixed-maturity investments and equity investments.

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.

Cincinnati Financial Corporation has a Value Score of 66, which is considered to be undervalued.

Cincinnati Financial Corporation’s price-earnings ratio is 11.9 compared to the industry median at 12.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Cincinnati Financial Corporation more attractive for value investors.

Cincinnati Financial Corporation’s price-to-book ratio is lower than its peers. This could make Cincinnati Financial Corporation more attractive for value investors when compared to the industry median at 1.13.

You can read more about Cincinnati Financial Corporation’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.

Conifer Holdings Inc’s Value Grade

Value Grade:

Conifer Holdings, Inc. is an insurance holding company engaged in the sale of property and casualty insurance products. It operates through three classes of insurance businesses: commercial lines, personal lines and wholesale agency business. The commercial insurance offers coverage for both commercial property and commercial liability, including commercial automobiles and workers? compensation. The personal insurance segment offers homeowners insurance and dwelling fire insurance products to individuals in several states. Its specialty homeowners? insurance product is primarily comprised of low-value dwelling insurance tailored for owners of lower valued homes, which offer in Illinois, Indiana and Texas. Wholesale agency business segment offers commercial and personal lines insurance products for its Insurance Company Subsidiaries as well as third-party insurers. Its subsidiaries insurance Red Cedar Insurance Company, White Pine Insurance Company and Sycamore Insurance Agency, Inc.

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.

Conifer Holdings Inc has a Value Score of 61, which is considered to be undervalued.

Conifer Holdings Inc’s price-to-book ratio is higher than its peers. This could make Conifer Holdings Inc less attractive for value investors when compared to the industry median at 1.13.

You can read more about Conifer 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.

Hallmark Financial Services, Inc.’s Value Grade

Value Grade:

Hallmark Financial Services, Inc. is an insurance holding company, which is engaged in the sale of property/casualty insurance products to businesses and individuals. The Company?s business includes marketing, distributing, underwriting, and servicing its insurance products, as well as providing other insurance related services. Its segments include Commercial Lines, Personal Lines and Runoff. The Standard Commercial Segment includes the package and monoline property/casualty and the Aviation business unit, which offers general aviation property/casualty insurance products and services. The Personal Segment includes the non-standard personal automobile and renters insurance products and services. The Runoff Segment consists of its Specialty Runoff business unit, which consists of the senior care facilities liability insurance business, the contract binding line of primary automobile insurance, and the satellite launch property/casualty insurance products, as well as specialty programs.

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.

Hallmark Financial Services, Inc. has a Value Score of 99, which is considered to be undervalued.

Hallmark Financial Services, Inc.’s price-to-book ratio is higher than its peers. This could make Hallmark Financial Services, Inc. less attractive for value investors when compared to the industry median at 1.13.

You can read more about Hallmark Financial Services, 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.

Hippo Holdings Inc’s Value Grade

Value Grade:

Hippo Holdings Inc. is a home protection company. The Company?s subsidiary includes Hippo Analytics Inc., which is a licensed insurance agency that provides various insurance services, including some or all services for affiliated and non-affiliated insurance carriers, including soliciting, marketing, servicing, underwriting or providing claims processing services for a variety of commercial and personal insurance products. The Company?s insurance company subsidiaries also include Spinnaker Insurance Company (Spinnaker), an Illinois domiciled insurance company, Spinnaker Specialty Insurance Company (SSIC), and Mainsail Insurance Company (MIC) that underwrites personal and commercial insurance products on a direct basis through licensed insurance agents and surplus lines brokers. The insurance products offered through Hippo Analytics Inc. primarily include homeowners? insurance policies, which protect customers from the risks of fire, wind and theft.

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.

Hippo Holdings Inc has a Value Score of 64, which is considered to be undervalued.

Hippo Holdings Inc’s price-to-book ratio is higher than its peers. This could make Hippo Holdings Inc less attractive for value investors when compared to the industry median at 1.13.

You can read more about Hippo 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.

ICC Holdings Inc’s Value Grade

Value Grade:

ICC Holdings, Inc. is a specialty insurance carrier primarily underwriting commercial multi-peril, liquor liability, workers? compensation, and umbrella liability coverage for the food and beverage industry through its subsidiary insurance company, Illinois Casualty Company (ICC). ICC specializes in the food and beverage industry. Its product language is based on Insurance Services Offices (ISO) forms, which is an industry standard. ICC also writes workers? compensation and commercial umbrella policies, which are written as complementary lines to the business owners policy (BOP) and liquor liability and are not offered on a stand-alone basis. ICC writes business in Arizona, Colorado, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Ohio, Pennsylvania, Utah, and Wisconsin and markets through independent agents. It primarily markets its products through a network of approximately 191 independent agents in the states that it writes in.

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.

ICC Holdings Inc has a Value Score of 93, which is considered to be undervalued.

ICC Holdings Inc’s price-earnings ratio is 8.1 compared to the industry median at 12.0. This means that it has a lower price relative to its earnings compared to its peers. This makes ICC Holdings Inc more attractive for value investors.

ICC Holdings Inc’s price-to-book ratio is higher than its peers. This could make ICC Holdings Inc less attractive for value investors when compared to the industry median at 1.13.

You can read more about ICC 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.

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 75, 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 1.13.

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 7 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.

• Ambac Financial Group, Inc. stock has a Value Grade of A.
• Cincinnati Financial Corporation stock has a Value Grade of B.
• Conifer Holdings Inc stock has a Value Grade of B.
• Hallmark Financial Services, Inc. stock has a Value Grade of A.
• Hippo Holdings Inc stock has a Value Grade of B.
• ICC Holdings Inc stock has a Value Grade of A.
• Hanover Insurance Group Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 7 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.

• 7 Undervalued Insurance - Property & Casualty Stocks for Thursday, October 19
• 4 Undervalued Insurance - Property & Casualty Stocks for Wednesday, October 18
• Why Lemonade Inc’s (LMND) Stock Is Down 6.26%
• 3 Undervalued Insurance - Property & Casualty Stocks for Tuesday, October 17

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