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Why Should You Hold CNA Financial (CNA) in Your Portfolio?
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CNA Financial Corporation (CNA - Free Report) is well poised for growth on the back of new business growth, improved current accident year underwriting results and effective capital deployment
Optimistic Growth Projections
The consensus estimate for 2023 earnings is pegged at $4.43, indicating a 9.2% increase from the year-ago reported figure on 6.6% higher revenues of $11.2 billion. The expected long-term earnings growth rate is pegged at 5%.
Earnings Surprise History
CNA Financial has a solid track record of beating earnings estimates in six of the last seven quarters.
Zacks Rank & Price Performance
CNA Financial currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 7.4% compared with the industry’s decline of 8.9%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
CNA Financial’s ROE for the trailing 12 months is 9.5%, expanding 220 basis points year over year. This compares favorably with the industry average of 5.7%. ROE reflects the insurer’s efficiency in using shareholders’ funds.
Style Score
CNA Financial has a favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
CNA Financial continues to witness a positive trend in premium growth across its three operating segments, Specialty, Commercial and International.
New business growth, continued strong rate, lower net catastrophe losses, improved non-catastrophe current accident year underwriting results and higher net earned premium are likely to boost the operations of each of the three segments.
The fixed-income portfolio continues to provide consistent earnings. The ongoing low-interest-rate environment is largely offset by returns in the limited partnership portfolio, common stock returns, improved current accident year underwriting results and growth in invested asset base that majorly contribute to its net investment income.
A lower expense ratio as well as an underlying loss ratio is expected to improve the underlying combined ratio.
CNA Financial has a conservative capital structure, with a level leverage ratio of 20%. The insurer continues to maintain capital above the target levels in support of the ratings. Apart from strong operating cash flow, CNA continues to maintain liquidity in the form of cash and short-term investments, which together provide sufficient liquidity to withstand significant business variability.
CNA Financial raised its dividend at a nine-year (2014-2022) CAGR of 28.6%. Its current dividend yield of 3.8% is better than the industry average of 0.4%.
RLI’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 45.89%. In the past year, RLI stock has risen 5.7%.
The Zacks Consensus Estimate for RLI’s 2022 earnings has moved 0.7% north in the past 30 days.
W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.08%. In the past year, W.R. Berkley's stock has increased 34.8%.
The Zacks Consensus Estimate for WRB’s 2022 and 2023 earnings has moved 6.5% and 5.1% north, respectively, in the past 60 days.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 41.72%. In the past year, American Financial has rallied 5.9%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 9.8% and 6.9% north, respectively, in the past 60 days.
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Why Should You Hold CNA Financial (CNA) in Your Portfolio?
CNA Financial Corporation (CNA - Free Report) is well poised for growth on the back of new business growth, improved current accident year underwriting results and effective capital deployment
Optimistic Growth Projections
The consensus estimate for 2023 earnings is pegged at $4.43, indicating a 9.2% increase from the year-ago reported figure on 6.6% higher revenues of $11.2 billion. The expected long-term earnings growth rate is pegged at 5%.
Earnings Surprise History
CNA Financial has a solid track record of beating earnings estimates in six of the last seven quarters.
Zacks Rank & Price Performance
CNA Financial currently carries a Zacks Rank #3 (Hold). In the past year, the stock has lost 7.4% compared with the industry’s decline of 8.9%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
CNA Financial’s ROE for the trailing 12 months is 9.5%, expanding 220 basis points year over year. This compares favorably with the industry average of 5.7%. ROE reflects the insurer’s efficiency in using shareholders’ funds.
Style Score
CNA Financial has a favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
CNA Financial continues to witness a positive trend in premium growth across its three operating segments, Specialty, Commercial and International.
New business growth, continued strong rate, lower net catastrophe losses, improved non-catastrophe current accident year underwriting results and higher net earned premium are likely to boost the operations of each of the three segments.
The fixed-income portfolio continues to provide consistent earnings. The ongoing low-interest-rate environment is largely offset by returns in the limited partnership portfolio, common stock returns, improved current accident year underwriting results and growth in invested asset base that majorly contribute to its net investment income.
A lower expense ratio as well as an underlying loss ratio is expected to improve the underlying combined ratio.
CNA Financial has a conservative capital structure, with a level leverage ratio of 20%. The insurer continues to maintain capital above the target levels in support of the ratings. Apart from strong operating cash flow, CNA continues to maintain liquidity in the form of cash and short-term investments, which together provide sufficient liquidity to withstand significant business variability.
CNA Financial raised its dividend at a nine-year (2014-2022) CAGR of 28.6%. Its current dividend yield of 3.8% is better than the industry average of 0.4%.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are RLI Corp. (RLI - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and American Financial Group, Inc. (AFG - Free Report) , each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
RLI’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 45.89%. In the past year, RLI stock has risen 5.7%.
The Zacks Consensus Estimate for RLI’s 2022 earnings has moved 0.7% north in the past 30 days.
W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.08%. In the past year, W.R. Berkley's stock has increased 34.8%.
The Zacks Consensus Estimate for WRB’s 2022 and 2023 earnings has moved 6.5% and 5.1% north, respectively, in the past 60 days.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 41.72%. In the past year, American Financial has rallied 5.9%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 9.8% and 6.9% north, respectively, in the past 60 days.