Back to top

Image: Bigstock

TPRE or RE: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in Insurance - Property and Casualty stocks are likely familiar with Third Point Reinsurance (TPRE - Free Report) and Everest Re (RE - 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.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Third Point Reinsurance is sporting a Zacks Rank of #2 (Buy), while Everest Re has a Zacks Rank of #4 (Sell). This means that TPRE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.

TPRE currently has a forward P/E ratio of 5.38, while RE has a forward P/E of 11.49. We also note that TPRE has a PEG ratio of 0.36. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RE currently has a PEG ratio of 1.15.

Another notable valuation metric for TPRE is its P/B ratio of 0.72. 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, RE has a P/B of 1.25.

Based on these metrics and many more, TPRE holds a Value grade of B, while RE has a Value grade of C.

TPRE 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 TPRE 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:

Third Point Reinsurance Ltd. (TPRE) - free report >>

Everest Re Group, Ltd. (RE) - free report >>

Published in