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MTG vs. ZURVY: Which Stock Is the Better Value Option?

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Investors with an interest in Insurance - Multi line stocks have likely encountered both MGIC Investment (MTG - Free Report) and Zurich Insurance Group Ltd. (ZURVY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, MGIC Investment is sporting a Zacks Rank of #2 (Buy), while Zurich Insurance Group Ltd. has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that MTG likely has seen a stronger improvement to its earnings outlook than ZURVY has recently. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

MTG currently has a forward P/E ratio of 9.30, while ZURVY has a forward P/E of 16.58. We also note that MTG has a PEG ratio of 1.62. 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. ZURVY currently has a PEG ratio of 1.76.

Another notable valuation metric for MTG is its P/B ratio of 1.25. 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, ZURVY has a P/B of 4.

Based on these metrics and many more, MTG holds a Value grade of B, while ZURVY has a Value grade of F.

MTG sticks out from ZURVY in both our Zacks Rank and Style Scores models, so value investors will likely feel that MTG is the better option right now.


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MGIC Investment Corporation (MTG) - free report >>

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