Mar 16 2014, 12:59pm CDT | by Forbes
If you screen for insurance stocks trading below book value, with price-to-earnings ratios below that of the market as a whole — and which pay a dividend — you will uncover these 3 that look attractive:
Lincoln National Corp. (NYSE:LNC) has been in the life and health insurance business since 1904. That’s a long time. It trades at $50.41 with a P/E of 11, a price-to-book of .98 and a 1.3% dividend. A year ago, you could have been into shares at 30. Nice move. In late 2011, the stock traded as low as 18 — Fed policy has been kind to this sector.
PartnerRe LTD. (NYSE:PRE) is a re-insurer based in Bermuda. It traded at $101 last week. The P/E is 9, the price-to-book is .80 and the dividend yield is 2.6%. A year ago, PRE could be had for 90. The 3- year low was 48 in late 2011. Long-term share holders must be pleased.
Symetra Financial (NYSE:SYA) markets life and health insurance, in business since 1957. The stock trades at $19.67 with a P/E of 11, a price-to-book of .79 and a 1.8% dividend. This one could have been purchased at 13.50 a year ago. It’s up from the 2011 low of 7.14. One caution: for an NYSE listing, it’s thinly traded with average daily volume at about 300k.
That these stocks have been in up trends is no guarantee that up trending will continue. Each one continues to trade above the significant 50 and 200-day moving averages. A price break below those lines would signal caution.
The intriguing old-school valuation metrics suggest a closer look may be warranted.
Discolusre: I do not have a position in these stocks, long or short.
Source: Forbes Business
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