RDN vs. MURGY: Which Stock Is the Better Value Option?

RDN MURGY

Investors interested in Insurance - Multi line stocks are likely familiar with Radian (RDN - Free Report) and Mnchener RckversicherungsGesellschaft (MURGY - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Currently, Radian has a Zacks Rank of #1 (Strong Buy), while Mnchener RckversicherungsGesellschaft has a Zacks Rank of #4 (Sell). This means that RDN'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 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.

RDN currently has a forward P/E ratio of 4.66, while MURGY has a forward P/E of 19.89. We also note that RDN has a PEG ratio of 0.93. 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. MURGY currently has a PEG ratio of 1.22.

Another notable valuation metric for RDN is its P/B ratio of 0.86. 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, MURGY has a P/B of 1.34.

These are just a few of the metrics contributing to RDN's Value grade of A and MURGY's Value grade of C.

RDN 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 RDN is likely the superior value option right now.

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