Back to top

Image: Bigstock

MET or PUK: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in stocks from the Insurance - Multi line sector have probably already heard of MetLife (MET - Free Report) and Prudential (PUK - 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, MetLife has a Zacks Rank of #2 (Buy), while Prudential has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that MET is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

MET currently has a forward P/E ratio of 7.83, while PUK has a forward P/E of 20.78. We also note that MET has a PEG ratio of 1.05. 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. PUK currently has a PEG ratio of 2.31.

Another notable valuation metric for MET is its P/B ratio of 0.77. 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, PUK has a P/B of 3.41.

Based on these metrics and many more, MET holds a Value grade of A, while PUK has a Value grade of C.

MET 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 MET is likely the superior value option right now.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


MetLife, Inc. (MET) - free report >>

Prudential Public Limited Company (PUK) - free report >>

Published in