NMIH or CB: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Insurance - Property and Casualty sector have probably already heard of NMI Holdings (NMIH) and Chubb (CB). But which of these two stocks presents investors with the better value opportunity right now? 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, NMI Holdings has a Zacks Rank of #2 (Buy), while Chubb has a Zacks Rank of #3 (Hold). This means that NMIH's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
NMIH currently has a forward P/E ratio of 9.11, while CB has a forward P/E of 13.55. We also note that NMIH has a PEG ratio of 0.93. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CB currently has a PEG ratio of 5.65.
Another notable valuation metric for NMIH is its P/B ratio of 1.60. 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, CB has a P/B of 1.80.
These are just a few of the metrics contributing to NMIH's Value grade of B and CB's Value grade of C.
NMIH sticks out from CB in both our Zacks Rank and Style Scores models, so value investors will likely feel that NMIH is the better option right now.
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
NMI Holdings Inc (NMIH) : Free Stock Analysis Report
Chubb Limited (CB) : Free Stock Analysis Report