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AXS vs. SIGI: Which Stock Is the Better Value Option?

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Investors with an interest in Insurance - Property and Casualty stocks have likely encountered both Axis Capital (AXS - Free Report) and Selective Insurance (SIGI - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Axis Capital and Selective Insurance are sporting Zacks Ranks of #1 (Strong Buy) and #5 (Strong Sell), respectively, right now. Investors should feel comfortable knowing that AXS likely has seen a stronger improvement to its earnings outlook than SIGI has recently. But this is just one piece of the puzzle for value investors.

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 6.92, while SIGI has a forward P/E of 22.50. We also note that AXS has a PEG ratio of 0.26. 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. SIGI currently has a PEG ratio of 1.42.

Another notable valuation metric for AXS is its P/B ratio of 1.22. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SIGI has a P/B of 1.94.

These metrics, and several others, help AXS earn a Value grade of A, while SIGI has been given a Value grade of C.

AXS 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 AXS is likely the superior value option right now.


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Axis Capital Holdings Limited (AXS) - free report >>

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