Investors looking for stocks in the Insurance - Life Insurance sector might want to consider either Brighthouse Financial (BHF) or Voya Financial (VOYA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Brighthouse Financial has a Zacks Rank of #2 (Buy), while Voya Financial has a Zacks Rank of #5 (Strong Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BHF has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
BHF currently has a forward P/E ratio of 4.65, while VOYA has a forward P/E of 12.40. We also note that BHF has a PEG ratio of 0.41. 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. VOYA currently has a PEG ratio of 0.73.
Another notable valuation metric for BHF is its P/B ratio of 0.31. 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. By comparison, VOYA has a P/B of 0.82.
Based on these metrics and many more, BHF holds a Value grade of A, while VOYA has a Value grade of C.
BHF 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 BHF is likely the superior value option right now.