ALL vs. TKOMY: Which Stock Is the Better Value Option?

Investors interested in stocks from the Insurance - Property and Casualty sector have probably already heard of Allstate (ALL) and Tokio Marine Holdings Inc. (TKOMY). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Allstate is sporting a Zacks Rank of #1 (Strong Buy), while Tokio Marine Holdings Inc. has a Zacks Rank of #5 (Strong Sell). This means that ALL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

ALL currently has a forward P/E ratio of 7.55, while TKOMY has a forward P/E of 14.63. We also note that ALL has a PEG ratio of 0.40. 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. TKOMY currently has a PEG ratio of 1.40.

Another notable valuation metric for ALL is its P/B ratio of 2.06. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TKOMY has a P/B of 2.53.

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

ALL sticks out from TKOMY in both our Zacks Rank and Style Scores models, so value investors will likely feel that ALL is the better option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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