ALL Vs. RNR: Which Stock Is The Better Value Option?

Investors interested in Insurance - Property and Casualty stocks are likely familiar with Allstate (ALL) and RenaissanceRe (RNR). 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.

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.

Right now, both Allstate and RenaissanceRe are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

ALL currently has a forward P/E ratio of 10.91, while RNR has a forward P/E of 13.25. We also note that ALL has a PEG ratio of 1.31. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. RNR currently has a PEG ratio of 1.39.

Another notable valuation metric for ALL is its P/B ratio of 1.51. 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, RNR has a P/B of 1.58.

These are just a few of the metrics contributing to ALL's Value grade of A and RNR's Value grade of C.

Both ALL and RNR are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ALL is the superior value option right now.