Investors interested in Insurance - Multi line stocks are likely familiar with Radian (RDN) and Axa Sa (AXAHY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Radian and Axa Sa are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that RDN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
RDN currently has a forward P/E ratio of 7.38, while AXAHY has a forward P/E of 10.95. We also note that RDN has a PEG ratio of 0.96. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AXAHY currently has a PEG ratio of 10.33.
Another notable valuation metric for RDN is its P/B ratio of 1.07. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, AXAHY has a P/B of 2.01.
These are just a few of the metrics contributing to RDN's Value grade of B and AXAHY's Value grade of C.
RDN is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that RDN is likely the superior value option right now.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.Â
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Keep it Clean. Please avoid obscene, vulgar, lewd,
racist or sexually-oriented language. PLEASE TURN OFF YOUR CAPS LOCK. Don't Threaten. Threats of harming another
person will not be tolerated. Be Truthful. Don't knowingly lie about anyone
or anything. Be Nice. No racism, sexism or any sort of -ism
that is degrading to another person. Be Proactive. Use the 'Report' link on
each comment to let us know of abusive posts. Share with Us. We'd love to hear eyewitness
accounts, the history behind an article.
(0) comments
Welcome to the discussion.
Log In
Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.