AEG or PUK: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Insurance - Multi line sector have probably already heard of Aegon NV (AEG) and Prudential (PUK). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Aegon NV has a Zacks Rank of #2 (Buy), while Prudential has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AEG is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

AEG currently has a forward P/E ratio of 6.17, while PUK has a forward P/E of 14.93. We also note that AEG has a PEG ratio of 0.19. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PUK currently has a PEG ratio of 0.95.

Another notable valuation metric for AEG is its P/B ratio of 1.33. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, PUK has a P/B of 1.94.

These are just a few of the metrics contributing to AEG's Value grade of A and PUK's Value grade of C.

AEG 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 AEG is likely the superior value option right now.