• Investors may be wondering if Assurant at about US$233.80 is still offering value after a strong run, or if they would now be paying up for the story.
• The stock has been relatively steady over the short term, with a 1% decline over the last week, a 6.9% gain over the last month, and returns of 21.9% over 1 year and 90.1% over 3 years.
• Recent attention on the stock has focused on how the business is positioned within the insurance sector and how investors are weighing its risk profile against peers. This has helped frame the current price moves as part of a broader reassessment of what investors are willing to pay for insurance stocks with Assurant's characteristics.
• Assurant currently has a valuation score of 4 out of 6. Next you will see how different valuation methods line up on the stock and, toward the end of the article, an even more holistic way to think about what that score really means.

Approach 1: Assurant Excess Returns Analysis

The Excess Returns model looks at how effectively a company is expected to earn above its cost of equity on each dollar of shareholder capital. Instead of focusing on near term earnings, it weighs the long term relationship between return on equity and the required return that shareholders demand.

For Assurant, the model uses a Book Value of $118.09 per share and a Stable EPS of $22.94 per share, based on weighted future Return on Equity estimates from 6 analysts. The Average Return on Equity used in the model is 16.03%, compared with a Cost of Equity of $10.17 per share. This leads to an estimated Excess Return of $12.77 per share. The Stable Book Value input is $143.12 per share, also sourced from weighted future Book Value estimates from 6 analysts.

Putting these assumptions together produces an estimated intrinsic value of about $501.08 per share under the Excess Returns model. Versus the recent share price of about $233.80, this implies an intrinsic discount of 53.3%, which in this framework assesses the stock as undervalued.

Result: UNDERVALUED

Our Excess Returns analysis suggests Assurant is undervalued by 53.3%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.

Approach 2: Assurant Price vs Earnings

For a profitable company like Assurant, the P/E ratio is a useful way to judge how much you are paying for each dollar of current earnings. It ties the share price directly to the earnings that support it, which many investors focus on when comparing established, income generating businesses.

What counts as a "normal" or "fair" P/E often reflects how the market views a company’s growth prospects and risk profile. Higher expected growth or lower perceived risk can justify a higher multiple, while slower growth or higher risk typically point to a lower one.

Assurant currently trades on a P/E of 11.73x, compared with the Insurance industry average of about 11.37x and a peer group average of 12.80x. Simply Wall St’s Fair Ratio for Assurant is 12.56x, which is its estimate of a suitable P/E given factors such as earnings growth, profit margins, market cap, risk profile and the industry it operates in.

This Fair Ratio is more tailored than a simple comparison with peers or the broad industry because it adjusts for company specific characteristics rather than assuming one size fits all. Since the Fair Ratio of 12.56x is higher than the current P/E of 11.73x, Assurant appears undervalued on this measure.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Assurant Narrative

Earlier it was mentioned that there is an even better way to understand valuation. On Simply Wall St, that comes through Narratives, where you outline your view of Assurant’s story, link it to your own assumptions for future revenue, earnings and margins, and the platform turns that into a financial forecast, a Fair Value, and a simple comparison against the current price. This updates automatically when fresh news or earnings arrive. One investor might build a Narrative around Assurant maintaining strong buybacks and steady margin resilience and arrive at a Fair Value near the current analyst consensus of US$260. Another could focus more on regulatory and competitive risks and set a lower Fair Value. Both Narratives then sit side by side on the Community page so you can quickly see which story and valuation logic you find more convincing for your own investment decisions.

Do you think there's more to the story for Assurant? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.