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Investors interested in stocks from the Insurance - Multi line sector have probably already heard of MetLife (MET) and Prudential (PUK). 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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
MetLife has a Zacks Rank of #2 (Buy), while Prudential has a Zacks Rank of #5 (Strong Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MET has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
MET currently has a forward P/E ratio of 7.79, while PUK has a forward P/E of 49.60. We also note that MET has a PEG ratio of 1.04. 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. PUK currently has a PEG ratio of 5.51.
Another notable valuation metric for MET is its P/B ratio of 0.77. 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, PUK has a P/B of 3.39.
Based on these metrics and many more, MET holds a Value grade of A, while PUK has a Value grade of D.
MET stands above PUK thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MET is the superior value option right now.
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MetLife, Inc. (MET) : Free Stock Analysis Report
Prudential Public Limited Company (PUK) : Free Stock Analysis Report
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