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On Jan 8, Zacks Investment Research upgraded ING U.S. Inc. (VOYA - Snapshot Report) to a Zacks Rank #2 (Buy) from a Zacks Rank #3 (Hold).

Why the Upgrade?

ING U.S. has witnessed rising earnings estimates on the back of solid results and a decent effort to increase shareholders’ value. This multi-line insurer delivered positive earnings surprises in two of the last four quarters, with an average beat of 39.1%. The expected long-term growth of the stock is pegged at 8.1%.

In its last reported quarter, net operating earnings of ING U.S stood at $1.08 a share, which significantly surpassed the Zacks Consensus Estimate by 63.6% and the year-ago quarter’s result by 42.1%. The outperformance came on the back of strong results at Retirement, Annuities and Individual Life segments.

Higher top-line growth was partially offset by expense growth, leading to an operating margin expansion. Operating margin improved 620 basis points year over year to 33.5%. Meanwhile, positive net flows also drove the asset under management during the quarter.   

During the quarter, the company’s asset under management (AUM) also improved, partially driven by positive net flows in both Investment Management and Retirement businesses.

ING U.S. is also garnering investors’ confidence by distributing more profits among its shareholders. Recently, the company has announced its regular quarterly dividend of one cent per share for its shareholders in the fourth quarter. This quarterly dividend currently yields at 0.11%.

Meanwhile, ING U.S. is looking reasonably good on its own too. The firm has seen solid earnings estimate revision activity over the past two months, suggesting analysts are becoming a bit more bullish on the firm’s prospects in both the short and the long term.

In fact, over the past two months, Zacks Consensus Estimate for 2013 have risen 3.9% to $3.21 a share, as it witnessed 5 upward revisions of the estimates during the same period. Estimates for 2014 also inched up1.1% to $2.83 per share in past 60 days.

Other Stocks to Consider

Other top-ranked multiline insurers worth considering include CNO Financial Group, Inc. (CNO - Analyst Report), Kemper Corp. (KMPR - Snapshot Report) and Prudential plc (PUK - Snapshot Report). All these stocks sport a Zacks Rank #1 (Strong Buy).

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