3 Undervalued Insurance - Property & Casualty Stocks for Tuesday, January 23 (2024)

Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 stocks made the list for top value stocks in the Insurance - Property & Casualty industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Insurance - Property & Casualty Stock News

Before choosing which top Insurance - Property & Casualty stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The sub-industry of property and casualty insurance has a promising fundamental outlook. Despite some inflation in claim costs brought on by pandemics and some uncertainty regarding the size of claims resulting from the conflict in Ukraine, industry profitability is expected to increase in 2022 due to an anticipated decrease in the number of significant global catastrophe claims that have plagued most insurers in recent years. However, it's likely that these losses will force the insurance industry to release adequate extra underwriting capacity, leading to firmer rates across many lines of coverage. The state of the global and domestic economies overall, as well as how well they recover from the recession brought on by COVID19, will determine how much demand there is for specific types of insurance products, particularly those in the commercial lines sector. The sector has $989 billion in surplus (or capital) from policyholders as of September 30, 2021 (the most recent date known), which helped to fund its $701 billion written premium base. Less than a 1:1 ratio was being used by the sector to leverage its capital. The industry has "excess" capital of close to $600 billion by assuming a historical (and somewhat theoretical) benchmark 2:1 leverage of capital. Insurers will be able to take advantage of higher rates and a rise in coverage demand during an economic recovery thanks to this "extra" capital (or underwriting capacity). The S&P Property & Casualty Insurance Index increased by 8.6% year-to-date until March 18, 2022, while the S&P 1500 Index fell by 6.2%. The S&P Property & Casualty Insurance Index increased by 16% in 2021, while the S&P 1500 Index increased by 26.7%.

Why Focus on Undervalued Insurance - Property & Casualty Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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3 Undervalued Insurance - Property & Casualty Stocks for Tuesday, January 23 (1)

3 Undervalued Insurance - Property & Casualty Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 3 undervalued stocks in the Insurance - Property & Casualty industry for Tuesday, January 23, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Insurance - Property & Casualty industry median.

CompanyTickerPrice/SalesPrice/EarningsEV/EBITDAShareholder YieldPrice/Book ValuePrice/Free Cash FlowValue Grade
Enact Holdings IncACT 4.01 7.1 4.9 4.0% 1.02 14.3B
Cincinnati Financial CorporationCINF 1.80 10.6 7.1 3.4% 1.65 10.7B
Investors Title CompanyITIC 1.32 13.7 6.5 1.4% 1.26naB

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Enact Holdings Inc’s Value Grade

Value Grade:

MetricScoreACTIndustry Median
Price/Sales 76 4.01 1.20
Price/Earnings 13 7.1 12.1
EV/EBITDA 20 4.96.5
Shareholder Yield 22 4.0% 2.7%
Price/Book Value 30 1.02 1.39
Price/Free Cash Flow 43 14.3 9.2

Enact Holdings, Inc. is a private mortgage insurance company. The Company is engaged in the business of writing and assuming residential mortgage guaranty insurance. The Company operates its business through its primary insurance subsidiary, Enact Mortgage Insurance Corporation, (EMICO). The insurance protects lenders and investors against certain losses resulting from nonpayment of loans secured by mortgages, deeds of trust, or other instruments constituting a lien on residential real estate. The Company offers private mortgage insurance products predominantly insuring prime-based, individually underwritten residential mortgage loans. Its primary mortgage insurance enables borrowers to buy homes with a down payment. Its primary mortgage insurance also facilitates the sale of these low-down payment mortgage loans in the secondary mortgage market, which are sold to government-sponsored enterprises. It also performs fee-based contract underwriting services for mortgage lenders.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Enact Holdings Inc has a Value Score of 76, which is considered to be undervalued.

When you look at Enact Holdings Inc’s price-to-sales ratio at 4.01 compared to the industry median at 1.20, this company has a higher price relative to revenue compared to its peers. This could make Enact Holdings Inc’s stock less attractive for value investors.

Enact Holdings Inc’s price-earnings ratio is 7.08 compared to the industry median at 12.13. This means it has a lower share price relative to earnings compared to its peers. This could make Enact Holdings Inc more attractive for value investors.

Now, let’s assess Enact Holdings Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 4.9, when compared to the industry median of 6.5, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Enact Holdings Inc’s shareholder yield is higher than its industry median ratio of 2.73%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Enact Holdings Inc’s price-to-book ratio is lower than its industry median ratio of 1.39. This could make Enact Holdings Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Enact Holdings Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Enact Holdings Inc’s price-to-free-cash-flow ratio is higher than its industry median ratio of 9.16. This could make Enact Holdings Inc less attractive because the higher P/FCF ratio indicates that Enact Holdings Inc is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Cincinnati Financial Corporation’s Value Grade

Value Grade:

MetricScoreCINFIndustry Median
Price/Sales 52 1.80 1.20
Price/Earnings 28 10.6 12.1
EV/EBITDA 36 7.16.5
Shareholder Yield 25 3.4% 2.7%
Price/Book Value 50 1.651.39
Price/Free Cash Flow 33 10.79.2

Cincinnati Financial Corporation is engaged in the business of property casualty insurance, which markets through independent insurance agencies in approximately 46 states. The Company operates through five segments: Commercial lines insurance, Personal lines insurance, Excess and surplus lines insurance, Life insurance, and Investments. The Commercial lines insurance segment includes five commercial business lines, such as commercial casualty, commercial property, commercial auto, workers? compensation, and other commercial lines. The Personal lines insurance segment includes three business lines, including personal auto, homeowner, and other personal lines. The Excess and surplus lines insurance segment includes commercial casualty and commercial property. The Life insurance segment includes term life insurance, worksite products, whole life insurance, and universal life insurance. The Investments segment invests in fixed-maturity investments and equity investments.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Cincinnati Financial Corporation has a Value Score of 70, which is considered to be undervalued.

Cincinnati Financial Corporation’s price-earnings ratio is 10.6 compared to the industry median at 12.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Cincinnati Financial Corporation more attractive for value investors.

Cincinnati Financial Corporation’s price-to-book ratio is lower than its peers. This could make Cincinnati Financial Corporation more attractive for value investors when compared to the industry median at 1.39.

You can read more about Cincinnati Financial Corporation’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Investors Title Company’s Value Grade

Value Grade:

MetricScoreITICIndustry Median
Price/Sales 42 1.32 1.20
Price/Earnings 39 13.7 12.1
EV/EBITDA 32 6.56.5
Shareholder Yield 35 1.4% 2.7%
Price/Book Value 39 1.261.39
Price/Free Cash Flownana9.2

Investors Title Company is a holding company that operates through its subsidiaries. The Company?s primary business activities include issuance of residential and commercial title insurance through Investors Title Insurance Company (ITIC) and National Investors Title Insurance Company (NITIC). Additionally, the Company provides tax-deferred real property exchange services through its subsidiaries, Investors Title Exchange Corporation (ITEC) and Investors Title Accommodation Corporation (ITAC); tax-deferred real property exchange services through its subsidiaries, Investors Title Exchange Corporation (ITEC) and Investors Title Accommodation Corporation (ITAC) and management services to title insurance agencies through its subsidiary, Investors Title Management Services (ITMS). ITIC and NITIC offer primary title insurance coverage to owners and mortgagees of real estate and assume reinsurance of title insurance risks from other title insurance companies.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Investors Title Company has a Value Score of 69, which is considered to be undervalued.

Investors Title Company’s price-earnings ratio is 13.7 compared to the industry median at 12.1. This means that it has a higher price relative to its earnings compared to its peers. This makes Investors Title Company less attractive for value investors.

Investors Title Company’s price-to-book ratio is higher than its peers. This could make Investors Title Company less attractive for value investors when compared to the industry median at 1.39.

You can read more about Investors Title Company’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

3 Undervalued Insurance - Property & Casualty Stocks for Tuesday, January 23 (3)

Other Insurance - Property & Casualty Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Insurance - Property & Casualty stocks as well as other industrys.

Choosing Which of the 3 Best Insurance - Property & Casualty Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

  • Enact Holdings Inc stock has a Value Grade of B.
  • Cincinnati Financial Corporation stock has a Value Grade of B.
  • Investors Title Company stock has a Value Grade of B.

Now that you have a bit more background about each of the 3 undervalued stocks in the Insurance - Property & Casualty industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

3 Undervalued Insurance - Property & Casualty Stocks for Tuesday, January 23 (4)

Additional Resources About Insurance - Property & Casualty Stocks

Want to learn more about Insurance - Property & Casualty stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

  • What You Need to Know About Allstate Corp's Q3 Earnings
  • What You Need to Know About Ambac Financial Group, Inc.'s Q3 Earnings
  • What You Need to Know About American Financial Group Inc's Q3 Earnings

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.


As a seasoned financial analyst and investment enthusiast, I have a deep understanding of the key financial metrics mentioned in the provided article. My expertise spans various industries, with a particular focus on value investing strategies.

The article emphasizes the importance of financial metrics such as the price-to-sales ratio, shareholder yield, and price-earnings ratio in identifying top value stocks in the Insurance - Property & Casualty industry. These metrics are crucial for value investors who seek to purchase stocks at a discount to their intrinsic value. The article also touches upon the significance of conducting thorough due diligence, analyzing historical data, public statements, and news coverage before making investment decisions.

Now, let's delve into the concepts used in the article:

  1. Price-to-Sales Ratio (P/S Ratio):

    • Definition: The price-to-sales ratio is a financial metric that compares a company's market capitalization to its revenue.
    • Example: Enact Holdings Inc has a P/S ratio of 4.01, indicating that its stock price is 4.01 times its revenue. A higher ratio may suggest that the stock is less attractive to value investors.
  2. Shareholder Yield:

    • Definition: Shareholder yield is the sum of a stock’s dividend yield and the percentage of net share buybacks over the previous 12 months.
    • Example: Enact Holdings Inc has a shareholder yield of 4.0%, which is higher than the industry median ratio of 2.73%. This could be considered attractive for value investors.
  3. Price-Earnings Ratio (P/E Ratio):

    • Definition: The price-earnings ratio is a valuation ratio that measures a company's current share price relative to its per-share earnings.
    • Example: Cincinnati Financial Corporation has a P/E ratio of 10.6, which is lower than the industry median at 12.1. This makes the stock more attractive to value investors.
  4. Enterprise-Value-to-EBITDA (EV/EBITDA) Ratio:

    • Definition: The EV/EBITDA ratio is a valuation metric that compares a company's enterprise value to its earnings before interest, taxes, depreciation, and amortization.
    • Example: Enact Holdings Inc has an EV/EBITDA ratio of 4.9, suggesting that the company may be considered undervalued compared to its peers in the industry.
  5. Price-to-Book Ratio:

    • Definition: The price-to-book ratio compares a company's market price per share to its book value per share.
    • Example: Investors Title Company has a price-to-book ratio higher than its peers, making it less attractive to value investors compared to the industry median.
  6. Price-to-Free-Cash-Flow Ratio (P/FCF Ratio):

    • Definition: The P/FCF ratio measures a company's market value relative to its operating cash flow.
    • Example: Enact Holdings Inc has a higher P/FCF ratio than the industry median, indicating that it may be considered less attractive to value investors.

The article also introduces the concept of the AAII’s A+ Investor Value Grade, derived from a stock’s Value Score. This score considers multiple valuation ratios, including P/S, P/E, EV/EBITDA, shareholder yield, price-to-book, and price-to-free-cash-flow ratios. The Value Grade helps investors assess the overall valuation of a stock in comparison to its peers.

In summary, the article provides valuable insights into the key financial metrics used by value investors to identify undervalued stocks in the Insurance - Property & Casualty industry. It emphasizes the importance of thorough analysis and due diligence in making informed investment decisions.

3 Undervalued Insurance - Property & Casualty Stocks for Tuesday, January 23 (2024)

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