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CB vs. THG: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Insurance - Property and Casualty sector have probably already heard of Chubb (CB - Free Report) and Hanover Insurance Group (THG - 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.

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.

Chubb has a Zacks Rank of #2 (Buy), while Hanover Insurance Group has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that CB likely has seen a stronger improvement to its earnings outlook than THG has recently. 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.

CB currently has a forward P/E ratio of 11.24, while THG has a forward P/E of 95.83. We also note that CB has a PEG ratio of 1.12. 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. THG currently has a PEG ratio of 2.57.

Another notable valuation metric for CB is its P/B ratio of 1.53. 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, THG has a P/B of 1.85.

These are just a few of the metrics contributing to CB's Value grade of B and THG's Value grade of C.

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


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Chubb Limited (CB) - free report >>

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