Back to top

Image: Bigstock

ZURVY vs. GSHD: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors interested in stocks from the Insurance - Multi line sector have probably already heard of Zurich Insurance Group Ltd. (ZURVY - Free Report) and Goosehead Insurance (GSHD - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Zurich Insurance Group Ltd. has a Zacks Rank of #1 (Strong Buy), while Goosehead Insurance has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ZURVY is likely seeing its earnings outlook improve to a greater extent. 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.

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.

ZURVY currently has a forward P/E ratio of 7.90, while GSHD has a forward P/E of 74.52. We also note that ZURVY has a PEG ratio of 0.46. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. GSHD currently has a PEG ratio of 2.41.

Another notable valuation metric for ZURVY is its P/B ratio of 3.50. 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, GSHD has a P/B of 1,983.04.

Based on these metrics and many more, ZURVY holds a Value grade of B, while GSHD has a Value grade of F.

ZURVY has seen stronger estimate revision activity and sports more attractive valuation metrics than GSHD, so it seems like value investors will conclude that ZURVY is the superior option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Zurich Insurance Group Ltd. (ZURVY) - free report >>

Goosehead Insurance (GSHD) - free report >>

Published in