MET or PUK: Which Is the Better Value Stock Right Now?
MET vs. PUK: Which Stock Is the Better Value Option?
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.
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 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. However, value investors will care about much more than just this.
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.
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.
MET currently has a forward P/E ratio of 7.77, while PUK has a forward P/E of 19.37. We also note that MET has a PEG ratio of 1.04. 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. PUK currently has a PEG ratio of 2.15.
Another notable valuation metric for MET is its P/B ratio of 0.77. 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, PUK has a P/B of 3.35.
These are just a few of the metrics contributing to MET's Value grade of A and PUK's Value grade of C.
MET has seen stronger estimate revision activity and sports more attractive valuation metrics than PUK, so it seems like value investors will conclude that MET is the superior option right now.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.Download FREE: How to Profit from Trillions on Spending for Infrastructure >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
MetLife, Inc. (MET): Free Stock Analysis Report
Prudential Public Limited Company (PUK): Free Stock Analysis Report
To read this article on Zacks.com click here.