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TRV vs. BRK.B: Which Stock Should Value Investors Buy Now?

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Investors interested in Insurance - Property and Casualty stocks are likely familiar with Travelers (TRV - Free Report) and Berkshire Hathaway B (BRK.B - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Travelers and Berkshire Hathaway B are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TRV is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

TRV currently has a forward P/E ratio of 13.27, while BRK.B has a forward P/E of 24.29. We also note that TRV has a PEG ratio of 2.09. 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. BRK.B currently has a PEG ratio of 3.47.

Another notable valuation metric for TRV is its P/B ratio of 1.33. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, BRK.B has a P/B of 1.35.

These metrics, and several others, help TRV earn a Value grade of A, while BRK.B has been given a Value grade of C.

TRV sticks out from BRK.B in both our Zacks Rank and Style Scores models, so value investors will likely feel that TRV is the better option right now.


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The Travelers Companies, Inc. (TRV) - free report >>

Berkshire Hathaway Inc. (BRK.B) - free report >>

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