Value Investment in the Banking and Insurance Industries

Much research explains how to compare and select appropriate stocks among a few choices, but little specifies the method of value investment in different business industries. The trade-off on value investing and stocks selections seems to be an interesting issue. This paper aims to help investors to use multiple decision factors and external relative company information to make value investing decisions among three companies, i.e., Grupo Financiero Galicia, Wintrust Financial Corporation, and the Progressive Corporation, in banking and insurance industries. To conduct our research, we apply four decision factors, i.e., cost, growth, profitability, and payout, to compare the measurement ratios among comparison groups. The research also includes non-numeric analysis on internal company performance including ownership structure, compensation program, and commercial program. The result indicates that the Progressive Corporation should be focused more, because of its low cost, increasing annual growth, stable profitability, and dividend payout. To sum up, based on the numeric factors and internal company analysis, investors should pay more attention to The Progressive Corporation.