We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Should You Retain Chubb Limited (CB) Stock in Your Portfolio?
Read MoreHide Full Article
Chubb Limited (CB - Free Report) is well-positioned for growth, driven by a compelling portfolio, strong renewal retention, positive rate increases, strategic initiatives to fuel profitability and a solid capital position.
Earnings Surprise History
Chubb’s earnings beat estimates in each of the last four quarters, the average being 23.78%.
Return on Equity
Chubb’s return on equity in the first quarter of 2024 was 16.3%, which expanded 320 bps year over year and exceeded the industry average of 7.8%. Core operating return on tangible equity expanded 110 bps year over year to 13.7% in the first quarter of 2024.
Zacks Rank & Price Performance
Chubb currently carries a Zacks Rank #3 (Hold). Over the past year, the stock has gained 33.5% compared with the industry’s growth of 26.6%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for Chubb’s 2024 revenues is pegged at $54.96 billion, implying a year-over-year improvement of 7.6%.
The consensus estimate for 2025 earnings per share and revenues indicates a year-over-year increase of 9.5% and 7.9%, respectively, from the corresponding 2024 estimates.
Earnings have improved 19.4% in the past five years, better than the industry average of 9.6%
Style Score
The company has a VGM Score of B. The VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
Business Tailwinds
Chubb’s growth strategy encompasses increasing focus on capitalizing on the potential of middle-market businesses (both domestic and international), and enhancing traditional core packages and specialty products. The insurer has been making investments in various strategic initiatives that pave the way for long-term growth. It is focusing on cyber insurance that has immense room for growth.
Chubb’s inorganic growth story impresses as the insurer pursues mergers and acquisitions that diversify its compelling portfolio, add capabilities, expand its geographic footprint and add synergies. The addition of Cigna’s life and non-life insurance companies and acquiring more stake in Huatai Group, among others, bears testimony to the strategy.
Acquisitions have improved premium revenues, the major component of an insurer’s top line. Premiums should also benefit from commercial P&C rate increases, new business and strong renewal retention.
Improving operating cash flow, coupled with a better rate environment, is likely to aid investment income to grow. Management estimates second-quarter adjusted net investment income to be between $1.5 billion and $1.52 billion, with continued growth thereafter.
CB has an impressive dividend history that also set the stage for the 31st year of dividend hike. The board will propose a 5.8% hike at its annual meeting.
CB has a dividend yield of 1.3%, better than the industry average of 0.3%. This makes the stock an attractive pick for yield-seeking investors. It also has $3.33 billion remaining under its share buyback authorization.
The Zacks Consensus Estimate for 2024 earnings has moved 0.2% north in the past 60 days, reflecting analyst optimism.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Arch Capital Group Ltd. (ACGL - Free Report) , RLI Corp. (RLI - Free Report) and NMI Holdings Inc (NMIH - Free Report) . While Arch Capital and RLI Corp. sport a Zacks Rank #1 (Strong Buy) each, NMI Holdings carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 28.41%. In the past year, shares of ACGL have climbed 36.3%.
The Zacks Consensus Estimate for ACGL’s 2024 and 2025 earnings has moved 5.1% and 3.3% north, respectively, in the past 30 days.
RLI Corp. has a solid track record of beating earnings estimates in three of the trailing four quarters and missing in one, the average being 132.39%. In the past year, shares of RLI have gained 13%.
The Zacks Consensus Estimate for RLI’s 2024 and 2025 earnings implies year-over-year growth of 16.1% and 3.2%, respectively.
NMI Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 8.60%. In the past year, shares of NMIH have jumped 33.3%.
The Zacks Consensus Estimate for NMIH’s 2024 and 2025 earnings implies year-over-year growth of 9.1% and 8.3%, respectively.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Should You Retain Chubb Limited (CB) Stock in Your Portfolio?
Chubb Limited (CB - Free Report) is well-positioned for growth, driven by a compelling portfolio, strong renewal retention, positive rate increases, strategic initiatives to fuel profitability and a solid capital position.
Earnings Surprise History
Chubb’s earnings beat estimates in each of the last four quarters, the average being 23.78%.
Return on Equity
Chubb’s return on equity in the first quarter of 2024 was 16.3%, which expanded 320 bps year over year and exceeded the industry average of 7.8%. Core operating return on tangible equity expanded 110 bps year over year to 13.7% in the first quarter of 2024.
Zacks Rank & Price Performance
Chubb currently carries a Zacks Rank #3 (Hold). Over the past year, the stock has gained 33.5% compared with the industry’s growth of 26.6%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for Chubb’s 2024 revenues is pegged at $54.96 billion, implying a year-over-year improvement of 7.6%.
The consensus estimate for 2025 earnings per share and revenues indicates a year-over-year increase of 9.5% and 7.9%, respectively, from the corresponding 2024 estimates.
Earnings have improved 19.4% in the past five years, better than the industry average of 9.6%
Style Score
The company has a VGM Score of B. The VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.
Business Tailwinds
Chubb’s growth strategy encompasses increasing focus on capitalizing on the potential of middle-market businesses (both domestic and international), and enhancing traditional core packages and specialty products. The insurer has been making investments in various strategic initiatives that pave the way for long-term growth. It is focusing on cyber insurance that has immense room for growth.
Chubb’s inorganic growth story impresses as the insurer pursues mergers and acquisitions that diversify its compelling portfolio, add capabilities, expand its geographic footprint and add synergies. The addition of Cigna’s life and non-life insurance companies and acquiring more stake in Huatai Group, among others, bears testimony to the strategy.
Acquisitions have improved premium revenues, the major component of an insurer’s top line. Premiums should also benefit from commercial P&C rate increases, new business and strong renewal retention.
Improving operating cash flow, coupled with a better rate environment, is likely to aid investment income to grow. Management estimates second-quarter adjusted net investment income to be between $1.5 billion and $1.52 billion, with continued growth thereafter.
CB has an impressive dividend history that also set the stage for the 31st year of dividend hike. The board will propose a 5.8% hike at its annual meeting.
CB has a dividend yield of 1.3%, better than the industry average of 0.3%. This makes the stock an attractive pick for yield-seeking investors. It also has $3.33 billion remaining under its share buyback authorization.
The Zacks Consensus Estimate for 2024 earnings has moved 0.2% north in the past 60 days, reflecting analyst optimism.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Arch Capital Group Ltd. (ACGL - Free Report) , RLI Corp. (RLI - Free Report) and NMI Holdings Inc (NMIH - Free Report) . While Arch Capital and RLI Corp. sport a Zacks Rank #1 (Strong Buy) each, NMI Holdings carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 28.41%. In the past year, shares of ACGL have climbed 36.3%.
The Zacks Consensus Estimate for ACGL’s 2024 and 2025 earnings has moved 5.1% and 3.3% north, respectively, in the past 30 days.
RLI Corp. has a solid track record of beating earnings estimates in three of the trailing four quarters and missing in one, the average being 132.39%. In the past year, shares of RLI have gained 13%.
The Zacks Consensus Estimate for RLI’s 2024 and 2025 earnings implies year-over-year growth of 16.1% and 3.2%, respectively.
NMI Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 8.60%. In the past year, shares of NMIH have jumped 33.3%.
The Zacks Consensus Estimate for NMIH’s 2024 and 2025 earnings implies year-over-year growth of 9.1% and 8.3%, respectively.