RNR vs. CB: Which Stock Is the Better Value Option?
Investors interested in Insurance - Property and Casualty stocks are likely familiar with RenaissanceRe (RNR) and Chubb (CB). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
RenaissanceRe has a Zacks Rank of #2 (Buy), while Chubb has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that RNR has an improving earnings 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.
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.
RNR currently has a forward P/E ratio of 6.78, while CB has a forward P/E of 13.77. We also note that RNR has a PEG ratio of 1.45. 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. CB currently has a PEG ratio of 5.74.
Another notable valuation metric for RNR is its P/B ratio of 1.46. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CB has a P/B of 1.83.
These metrics, and several others, help RNR earn a Value grade of B, while CB has been given a Value grade of C.
RNR stands above CB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that RNR is the superior value option right now.
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RenaissanceRe Holdings Ltd. (RNR) : Free Stock Analysis Report
Chubb Limited (CB) : Free Stock Analysis Report