Back to top

Image: Bigstock

Should Value Investors Buy The Hartford Financial Services Group (HIG) Stock?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is The Hartford Financial Services Group (HIG - Free Report) . HIG is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.47, which compares to its industry's average of 9.98. Over the past 52 weeks, HIG's Forward P/E has been as high as 12.52 and as low as 8.15, with a median of 9.99.

Another valuation metric that we should highlight is HIG's P/B ratio of 1.56. 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. This stock's P/B looks solid versus its industry's average P/B of 2.21. Over the past 12 months, HIG's P/B has been as high as 1.62 and as low as 1.26, with a median of 1.40.

Finally, investors will want to recognize that HIG has a P/CF ratio of 8.37. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 9.71. Over the past year, HIG's P/CF has been as high as 9.28 and as low as 5.54, with a median of 7.58.

MGIC Investment (MTG - Free Report) may be another strong Insurance - Multi line stock to add to your shortlist. MTG is a # 2 (Buy) stock with a Value grade of A.

Shares of MGIC Investment are currently trading at a forward earnings multiple of 6.47 and a PEG ratio of 1.29 compared to its industry's P/E and PEG ratios of 9.98 and 0.84, respectively.

MTG's price-to-earnings ratio has been as high as 8.56 and as low as 5.06, with a median of 6.89, while its PEG ratio has been as high as 1.71 and as low as 1.01, with a median of 1.38, all within the past year.

MGIC Investment also has a P/B ratio of 1 compared to its industry's price-to-book ratio of 2.21. Over the past year, its P/B ratio has been as high as 1.11, as low as 0.77, with a median of 0.96.

Value investors will likely look at more than just these metrics, but the above data helps show that The Hartford Financial Services Group and MGIC Investment are likely undervalued currently. And when considering the strength of its earnings outlook, HIG and MTG sticks out as one of the market's strongest value stocks.

In-Depth Zacks Research for the Tickers Above

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

The Hartford Financial Services Group, Inc. (HIG) - free report >>

MGIC Investment Corporation (MTG) - free report >>

Published in