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RLI Benefits From Premium Growth, Rising Costs a Concern
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RLI Corp. (RLI - Free Report) , which has successfully met the evolving demands and expectations of clients for years through a solid product and service portfolio, has been witnessing a continued improvement in revenues. Higher premiums, business expansion, operational strength plus a robust and a broad product suite have contributed to its improvement and we expect this momentum to remain in the near term.
Moreover, the company’s combined ratio — a measure of underwriting profitability — has been displaying an excellent track record in spite of incurring substantial catastrophe losses over a considerable period of time. Also, in its effort to boost underwriting results, the company has decided to drop the underperforming products from its property business.
On the back of rising interest rates, larger invested asset base and stable reinvestment rates, the property and casualty (P&C) insurer has been experiencing better investment results and we expect this growth trajectory to sustain in the future.
Notably, RLI Corp. has a favorable Growth Score of B. The Growth Score analyzes a company’s growth prospects and also evaluates its corporate financial statements. Therefore, this P&C insurer’s Growth Score raises optimism among investors.
In addition, a robust capital position aids the company to add shareholder value via share buybacks, thereby increasing investor confidence in the stock. In fact, RLI Corp. returned about $1.2 billion to its shareholders in the last decade. Also, this P&C insurer’s regular quarterly payout witnessed a six-year CAGR (2013-2018) of 6.6%. Shareholder-friendly moves like this makes the stock an attractive pick for yield-seeking investors.
Shares of this Zacks Rank #3 (Hold) P&C insurer have rallied 20.1% year to date, outperforming the industry's increase of 6.9%. We expect the aforementioned strengths to drive the stock higher in the near term.
However, the company’s exposure to catastrophe loss will persistently weigh on its overall performance. Further, escalating expenses due to higher loss and settlement expenses, policy acquisition costs and insurance operating expenses will limit the operating margin expansion.
Nonetheless, the consensus mark for current-year earnings per share is pegged at $2.17, representing a year-over-year surge of nearly 34.8%. For 2019, the metric is pegged at $2.20 per share, reflecting a 1.4% rise year over year.
MGIC Investment provides private mortgage insurance and ancillary services to lenders and government-sponsored entities in the United States. The company delivered positive surprises in all the trailing four reported quarters, the average being 34.32%.
Arch Capital provides property, casualty and mortgage insurance and reinsurance products worldwide. The company pulled off positive surprises in all the previous four reported quarters, the average being 13.29%.
MetLife engages in the insurance, annuities, employee benefits and asset management businesses. The company came up with positive surprises in the preceding four reported quarters, the average being 9.67%.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
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RLI Benefits From Premium Growth, Rising Costs a Concern
RLI Corp. (RLI - Free Report) , which has successfully met the evolving demands and expectations of clients for years through a solid product and service portfolio, has been witnessing a continued improvement in revenues. Higher premiums, business expansion, operational strength plus a robust and a broad product suite have contributed to its improvement and we expect this momentum to remain in the near term.
Moreover, the company’s combined ratio — a measure of underwriting profitability — has been displaying an excellent track record in spite of incurring substantial catastrophe losses over a considerable period of time. Also, in its effort to boost underwriting results, the company has decided to drop the underperforming products from its property business.
On the back of rising interest rates, larger invested asset base and stable reinvestment rates, the property and casualty (P&C) insurer has been experiencing better investment results and we expect this growth trajectory to sustain in the future.
Notably, RLI Corp. has a favorable Growth Score of B. The Growth Score analyzes a company’s growth prospects and also evaluates its corporate financial statements. Therefore, this P&C insurer’s Growth Score raises optimism among investors.
In addition, a robust capital position aids the company to add shareholder value via share buybacks, thereby increasing investor confidence in the stock. In fact, RLI Corp. returned about $1.2 billion to its shareholders in the last decade. Also, this P&C insurer’s regular quarterly payout witnessed a six-year CAGR (2013-2018) of 6.6%. Shareholder-friendly moves like this makes the stock an attractive pick for yield-seeking investors.
Shares of this Zacks Rank #3 (Hold) P&C insurer have rallied 20.1% year to date, outperforming the industry's increase of 6.9%. We expect the aforementioned strengths to drive the stock higher in the near term.
However, the company’s exposure to catastrophe loss will persistently weigh on its overall performance. Further, escalating expenses due to higher loss and settlement expenses, policy acquisition costs and insurance operating expenses will limit the operating margin expansion.
Nonetheless, the consensus mark for current-year earnings per share is pegged at $2.17, representing a year-over-year surge of nearly 34.8%. For 2019, the metric is pegged at $2.20 per share, reflecting a 1.4% rise year over year.
Stocks to Consider
Some better-ranked stocks from the insurance industry are MGIC Investment Corporation (MTG - Free Report) , Arch Capital Group Ltd. (ACGL - Free Report) and MetLife, Inc. (MET - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
MGIC Investment provides private mortgage insurance and ancillary services to lenders and government-sponsored entities in the United States. The company delivered positive surprises in all the trailing four reported quarters, the average being 34.32%.
Arch Capital provides property, casualty and mortgage insurance and reinsurance products worldwide. The company pulled off positive surprises in all the previous four reported quarters, the average being 13.29%.
MetLife engages in the insurance, annuities, employee benefits and asset management businesses. The company came up with positive surprises in the preceding four reported quarters, the average being 9.67%.
3 Medical Stocks to Buy Now
The greatest discovery in this century of biology is now at the flashpoint between theory and realization. Billions of dollars in research have poured into it. Companies are already generating revenue, and cures for a variety of deadly diseases are in the pipeline.
So are big potential profits for early investors. Zacks has released an updated Special Report that explains this breakthrough and names the best 3 stocks to ride it.
See them today for free >>