Are Investors Undervaluing Allstate (ALL) Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Allstate (ALL). ALL is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value.

Value investors also use the P/S ratio. The P/S ratio is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ALL has a P/S ratio of 0.8. This compares to its industry's average P/S of 1.27.

Finally, investors should note that ALL has a P/CF ratio of 8.66. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. ALL's P/CF compares to its industry's average P/CF of 12.90. Over the past year, ALL's P/CF has been as high as 14.16 and as low as 8.07, with a median of 10.58.

Another great Insurance - Property and Casualty stock you could consider is The Travelers Companies (TRV), which is a Zacks Rank of #2 (Buy) stock with a Value Score of A.

Shares of The Travelers Companies currently hold a Forward P/E ratio of 11.60, and its PEG ratio is 2.87. In comparison, its industry sports average P/E and PEG ratios of 27.71 and 4.24.

Over the past year, TRV's P/E has been as high as 14.64, as low as 11.13, with a median of 12.44; its PEG ratio has been as high as 4.80, as low as 1.01, with a median of 2.83 during the same time period.

The Travelers Companies sports a P/B ratio of 2.11 as well; this compares to its industry's price-to-book ratio of 1.55. In the past 52 weeks, TRV's P/B has been as high as 2.22, as low as 1.85, with a median of 2.07.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Allstate and The Travelers Companies are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ALL and TRV feels like a great value stock at the moment.

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

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