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On June 25, Zacks Investment Research upgraded U.S. property and casualty insurer The Chubb Corp. (CB - Analyst Report) to Zacks Rank #2 (Buy).

Why the Upgrade?

Driven by a consistent strong operating performance reported by Chubb over several quarters, the stock has seen an upward revision in its earnings estimates. Over the last 60 days, the Zacks Consensus Estimate for 2014 moved up 0.7% to $7.33. For 2015, the Zacks Consensus Estimate moved up 0.5% to $7.80 per share over the  same time frame. The expected long-term earnings growth is 9.7%.

Chubb enjoys competitive advantage within its specialty and upscale personal insurance businesses. The company’s niche market position is reflected in its consistent earnings outperformance made evident by positive surprises for 22 straight quarters, barring the last in which the bottom line matched the Zacks Consensus Estimate.

Delving into the company’s segments, Commercial Insurance has consistently impressed with its earnings. The segment has been witnessing a low single-digit increase in average renewal rates for the past several quarters. Retention ratio stands at a stable level.

Chubb’s Personal Insurance is also witnessing a gradual market improvement. Net premium written in this segment has been increasing over several quarters, led by strong premium increases from international business.

The strength in Chubb’s international business is in fact its arsenal for its future growth.

Strong capital management witnessed by regular share repurchases and continuous dividend increase over several years makes the stock a favorite among investors. During the first quarter, the company hiked its quarterly dividend by 13.6% to 50 cents per share. It was Chubb's 32nd consecutive annual dividend increase.

Investors interested in property and casualty industry may look at Endurance Specialty Holdings Ltd. (ENH - Snapshot Report), Federated National Holding Company (FNHC - Snapshot Report) and AmTrust Financial Services, Inc. (AFSI - Snapshot Report). All these stocks hold a Zacks Rank #1 (Strong Buy).
 

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