Employers Holdings currently trades at $40.08 per share and has shown little upside over the past six months, posting a small loss of 4.8%.

Is now the time to buy Employers Holdings, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.

Why Do We Think Employers Holdings Will Underperform?

We don't have much confidence in Employers Holdings. Here are three reasons why EIG doesn't excite us and a stock we'd rather own.

1. Net Premiums Earned Point to Soft Demand

Net premiums earned are net of what’s paid to reinsurers (insurance for insurance companies), which are used by insurers to protect themselves from large losses.

Employers Holdings’s net premiums earned has grown at a 2.7% annualized rate over the last two years, much worse than the broader insurance industry.

3. EPS Trending Down

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Sadly for Employers Holdings, its EPS declined by 21.9% annually over the last five years while its revenue grew by 3.8%. This tells us the company became less profitable on a per-share basis as it expanded.

Final Judgment

We see the value of companies helping consumers, but in the case of Employers Holdings, we’re out. That said, the stock currently trades at 0.8× forward P/B (or $40.08 per share). While this valuation is optically cheap, the potential downside is huge given its shaky fundamentals. There are superior stocks to buy right now. We’d suggest looking at a safe-and-steady industrials business benefiting from an upgrade cycle.

Stocks We Would Buy Instead of Employers Holdings

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