Back to top

Analyst Blog

On Apr 9, 2013, Zacks Investment Research upgraded The Chubb Corporation (CB - Analyst Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Chubb is currently on a high, driven by its capital deployment policy, rating affirmation and strong earnings expectations for the first quarter of 2013. As a result of the positive momentum provided by these factors, the company’s share prices are soaring.

On Mar 8, credit rating agency A.M. Best reiterated the issuer credit rating of “aa-”, all long-term debt and indicative ratings and the “AMB-1+” rating on the commercial paper of Chubb. The rating action came on the back of the company’s consistent operating profitability, maintenance of superior risk-adjusted capital, a strong brand name, disciplined underwriting practices, low debt level and a niche presence in the specialty and personal lines business segment.

Additionally, on Feb 28, the board of directors of Chubb approved a 7.3% increase in its quarterly dividend. Earlier, on Jan 31, the board also approved a new $1.3 billion share repurchase program.

Chubb also has a strong earnings trend. The company reported positive earning surprise in all four quarters in 2012, with an average surprise of 49.1%.

Moreover, the Zacks Consensus Estimate for the first-quarter earnings is $1.69 per share, with an Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of +8.28%. Our proven model shows that the property & casualty insureris likely to beat earnings in the first quarter of 2013 because it has a right combination of a positive Earnings ESP and a Zacks Rank #1. Chubb is expected to release its financial results for the first quarter of 2013 after the closing bell on Apr 25.

Other Stocks to Consider

Other stocks in the property and casualty insurance sector that are worth a look are Arch Capital Group Ltd. (ACGL - Snapshot Report), Aspen Insurance Holdings Ltd. (AHL - Snapshot Report) and AXIS Capital Holdings Limited (AXS - Analyst Report). All these are Zacks Rank #1 (Strong Buy) companies.

Please login to Zacks.com or register to post a comment.