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AXS vs. BRK.B: Which Stock Is the Better Value Option?

AXS vs. BRK.B: Which Stock Is the Better Value Option?

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This story originally appeared on Zacks

Investors looking for stocks in the Insurance - Property and Casualty sector might want to consider either Axis Capital (AXS) or Berkshire Hathaway B (BRK.B). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

- Zacks

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Axis Capital has a Zacks Rank of #2 (Buy), while Berkshire Hathaway B has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AXS has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

AXS currently has a forward P/E ratio of 12.03, while BRK.B has a forward P/E of 24.43. We also note that AXS has a PEG ratio of 2.41. 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. BRK.B currently has a PEG ratio of 3.49.

Another notable valuation metric for AXS is its P/B ratio of 0.90. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, BRK.B has a P/B of 1.34.

These are just a few of the metrics contributing to AXS's Value grade of A and BRK.B's Value grade of C.

AXS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that AXS is likely the superior value option right now.





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Axis Capital Holdings Limited (AXS): Free Stock Analysis Report

 

Berkshire Hathaway Inc. (BRK.B): Free Stock Analysis Report

 

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