Back to top
We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties. You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies. In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Image: Bigstock
AXS or ALL: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Insurance - Property and Casualty sector might want to consider either Axis Capital (AXS - Free Report) or Allstate (ALL - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Axis Capital has a Zacks Rank of #2 (Buy), while Allstate has a Zacks Rank of #3 (Hold). This means that AXS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
AXS currently has a forward P/E ratio of 7.05, while ALL has a forward P/E of 57.54. We also note that AXS has a PEG ratio of 1.41. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ALL currently has a PEG ratio of 8.22.
Another notable valuation metric for AXS is its P/B ratio of 1.05. 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, ALL has a P/B of 1.85.
These are just a few of the metrics contributing to AXS's Value grade of A and ALL's Value grade of C.
AXS has seen stronger estimate revision activity and sports more attractive valuation metrics than ALL, so it seems like value investors will conclude that AXS is the superior option right now.