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CNA or BRK.B: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Insurance - Property and Casualty sector might want to consider either CNA Financial (CNA - Free Report) or Berkshire Hathaway Inc. (BRK.B - 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

CNA Financial and Berkshire Hathaway Inc. are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CNA is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

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.

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.

CNA currently has a forward P/E ratio of 11.48, while BRK.B has a forward P/E of 20.56. We also note that CNA has a PEG ratio of 2.30. 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. BRK.B currently has a PEG ratio of 2.94.

Another notable valuation metric for CNA is its P/B ratio of 1.11. 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, BRK.B has a P/B of 1.51.

Based on these metrics and many more, CNA holds a Value grade of B, while BRK.B has a Value grade of D.

CNA stands above BRK.B thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CNA is the superior value option right now.


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

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