Discovery FTSE undervalued stocks may be easier than you think. OK, just because a stock is down doesn’t necessarily mean it’s a good value. However, by applying various financial metrics and adding your own research, it is possible to find companies that could make a comeback in the coming years. Here are two that I noticed.

Gone with the wind

The first one is Renewable Infrastructure Group (LSE:TRIG). The company’s shares are down 12% over the past year and are near 52-week lows. A key factor influencing this move was lower expected electricity prices. This had a direct impact on future revenues from wind and solar assets.

This matters because the company’s valuation depends largely on its projected long-term cash flows from power generation. So if the current assumption is lower prices, this could result in lower profits, which investors will have to adjust to.

Still, I think the backlash was too much. The share price should closely reflect the net asset value (NAV) of all infrastructure assets held. However, the company’s shares are currently trading at a 31% discount to the last reported NAV. This may indicate that it is underestimated.

Moreover, from a dividend standpoint, this looks like a bargain. The current dividend rate is 11.67%, which makes it one of the highest on the market FTSE250. Dividend per share has been growing for several years and I see no immediate threat of its reduction.

Of course, the risk of lower electricity prices is an ongoing concern. However, I find it arduous to maintain this state of affairs for long, given the growing demand from electric vehicles and AI-based data centers.

Further space to run

The second option is Hiscox (LSE:HSX). The share price is up almost 40% in the last year, but I still think it’s a good value! For starters, the price-to-earnings ratio is 10.6. This is below FTSE100 the average ratio is 18, which means the stock has some way to go before it looks fairly valued using this ratio.

Thanks to this, the company has good dynamics. The main driver of the result was the consistent profits from the insurance business, demonstrated by total ratios well below 100% (a key indicator of insurance profitability). This metric shows underwriting discipline, which should give investors confidence that the team knows what it’s doing.

It also benefits from growth in most market segments. This applies to both retail and reinsurance. The outlook appears good, with premiums expected to enhance. As a result, I simply don’t think the share price has kept pace with the company over the last year, which has resulted in the company being undervalued.

There is always a risk of catastrophic losses due to natural disasters. This is an inherent risk of insurance companies, but it cannot be avoided by investing in this sector.

Overall, I think both stocks look like bargains and should be considered by anyone looking to add to their portfolio right now.