Investors looking for stocks in the Insurance - Property and Casualty sector might want to consider either Arch Capital Group (ACGL) or CCC Intelligent Solutions Holdings Inc. (CCCS). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Arch Capital Group has a Zacks Rank of #2 (Buy), while CCC Intelligent Solutions Holdings Inc. has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ACGL is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
ACGL currently has a forward P/E ratio of 10.82, while CCCS has a forward P/E of 28.16. We also note that ACGL has a PEG ratio of 1.08. 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. CCCS currently has a PEG ratio of 1.16.
Another notable valuation metric for ACGL is its P/B ratio of 2.02. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, CCCS has a P/B of 2.71.
These are just a few of the metrics contributing to ACGL's Value grade of B and CCCS's Value grade of D.
ACGL 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 ACGL is likely the superior value option right now.
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