Highlights

  • Allstate shows 135.84% one-year basic EPS growth, a P/E of 5.05 and PEG of 0.07.
  • Second quarter net income applicable to common shareholders was $3,241 million, against $2,079 million.
  • Property-Liability combined ratio was 86.6% in the second quarter, against 91.1% a year earlier.
  • Allstate repurchased 8 million shares for $1.66 billion; $2.60 billion remains under its authorization.

An undervalued growth stock pairs earnings growth with its P/E and PEG ratios, and Allstate (NYSE:ALL) shows all three: basic earnings per share grew 135.84% over one year, the trailing twelve-month P/E ratio is 5.05 and the PEG ratio, on an expected basis, is 0.07, with shares trading at USD 250.96 on October 28, 2026, down 0.30%. Alongside those figures, the personal property-liability and protection services group authorized a $4.00 billion share repurchase program in February, declared a $1.08 per share common dividend in May, and reported second quarter 2026 net income applicable to common shareholders of $3,241 million in early August.

Based in Northbrook, Illinois, and incorporated in Delaware, Allstate states a two-part strategy: increase personal property-liability market share and expand protection offerings. Its segments are Allstate Protection (auto, homeowners, specialty lines, commercial lines, brokered solutions and collateral protection), Run-off Property-Liability, Protection Services (Protection Plans, Roadside, Dealer Services, Identity Protection and Arity) and Corporate. Management measures segment profit by underwriting income for Allstate Protection and Run-off Property-Liability, and by adjusted net income for Protection Services and Corporate.

Growth: Second Quarter Earnings, Underwriting and Policy Counts

Net income applicable to common shareholders was $5,669 million for the first six months against $2,645 million. Second quarter basic earnings per share were $12.66 against $7.86, and diluted earnings per share were $12.51 against $7.76. The company said the quarterly increase was primarily due to higher underwriting income and valuation gains on equity investments. Total revenues were $18,596 million, up 11.8%.

Allstate Protection underwriting income was $2,006 million against $1,283 million. The Property-Liability combined ratio was 86.6% against 91.1%, with auto at 83.3% and homeowners at 94.6%. Prior year reserve reestimates were releases of $641 million against $370 million. Net gains on investments and derivatives were $1,055 million against net losses of $144 million.

Auto policies in force were 25,951 thousand, up 2.8%, and homeowners policies in force were 7,819 thousand, up 2.9%.

Valuation: P/E of 5.05, PEG of 0.07 and Management Commentary

The P/E ratio of 5.05 is measured on trailing twelve-month earnings, and the PEG ratio of 0.07 on expected growth. Book value per diluted common share was $123.38 at June 30, 2026, against $82.40 a year earlier. Return on average common shareholders' equity for the twelve months ended June 30, 2026 was 49.1%, against 29.6%.

On the earnings call, Chairman, President and Chief Executive Officer Thomas Wilson referred to the company's low P/E, said annual free cash flow relative to market capitalization is far in excess of the S&P 500, and closed by saying that at this price, operational excellence, sustainable growth and capital generation are not available elsewhere.

Capital Returns and Balance Sheet

Allstate repurchased 8 million common shares, or 3.0% of shares outstanding at December 31, 2025, for $1.66 billion in the first six months. The $4.00 billion program, authorized February 4, 2026, must be completed by February 29, 2028. Shareholders' equity was $33.70 billion at June 30, 2026, against $30.61 billion at December 31, 2025. Debt was $7,492 million, including $550 million maturing in December 2026, and holding company deployable assets were $9.45 billion.

Disclosed Risks and Outlook

The expense ratio was 21.8% against 20.8%; management said about half of the increase related to advertising and most of the remainder to a nonrecurring legal accrual. Protection Services adjusted net income was $53 million against $60 million, which the company attributed primarily to lower margins on major appliances at Protection Plans.

Allstate disclosed a July 2026 lawsuit by the Oklahoma Attorney General alleging that its homeowners insurance practices violate Oklahoma consumer protection and racketeering laws, seeking injunctive relief, restitution, disgorgement, statutory damages, civil penalties and attorneys' fees. The company estimated the reasonably possible loss above accrued amounts for certain disclosed matters at zero to $51 million pre-tax, and management stated that it believes the outcome of all disclosed matters is not likely to have a material effect on financial position.

Wilson said the company will complete its $4 billion repurchase commitment. The company said it will pursue rate adjustments where it achieves acceptable returns and implement rates where needed to keep pace with costs. Management declined to give a forward view on severity, and the company stated that sustained oil price increases may change auto claims frequency and increase severity in auto and homeowners coverages.