Will Allstate Stock Make Sure Your Portfolio Stays Safe?

The security could benefit from an unwinding of pessimism

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Allstate Corporation (NYSE:ALL) is up 1.7% at $124.83 at last check. The insurance stock has been in recovery mode since early December, after bouncing off a roughly 10-month low near the $106 mark. Earlier this month, shares rallied to the $127 area -- their highest level since November -- with support from the 40-day moving average. Longer term, Allstate stock boasts a healthy 18.5% year-over-year lead.

ALL 40 Day

The security could benefit from an unwinding of pessimism in the options pits. This is per ALL's Schaeffer's put/call open interest ratio (SOIR) of 1.18, which sits in the 84th percentile of its 12-month range. This suggests short-term options traders have rarely been more put-biased.

It's also worth noting the stock's Schaeffer's Volatility Scorecard (SVS) sits at 80 out of 100, meaning the equity has exceeded option traders' volatility expectations during the past year.

From a fundamental point of view, Allstate stock has a very intriguing valuation. ALL trades at a forward price-earnings ratio of 12.00, and a price-sales ratio of 0.74. The insurance name has also increased its annual revenues 13% since 2020, and 27% since 2018.

However, the company’s annual net income has decreased 71% over the past year, after growing 148% between 2018 and 2020. Still, Allstate is anticipated to resume its growth rate with, estimates projecting 32% earnings growth, and a 3.6% revenue jump for 2023. This makes Allstate stock a solid option for long-term investors, given its solid dividend yield of 2.64%, and attractive valuation.

 

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