Selective Insurance Group, Inc. (SIGI - Free Report) has been riding on improved premium growth and strong net investment income, which is aiding its top line.
The company has a decent surprise history. It beat estimates in two of the trailing four quarters, the average beat being 5.9%. The stock has seen the Zacks Consensus Estimate being revised 3.2% downward over the last 60 days for current-quarter earnings.
Let’s delve into the factors that bode well for the company.
The P&C insurer continues to ride on geographic expansion for growth and diversification. Constant premium growth across segments helped the company’s total premiums improve 6.6% year over year in 2019. This upside can be attributed to strong retention and new business in the Standard Commercial Lines segment. As a result, the company’s top line registered 10.1% year-over-year growth in 2019.
Selective Insurance banks on impressive investment results. Its net investment income climbed 13% in 2019, driven by active portfolio management and a stellar operating cash flow. For 2020, the firm projects an after-tax investment income of $185 million, up from the prior guidance of $175 million.
The company also flaunts a sound capital structure, and remains committed toward returning value to its policyholders and shareholders via dividend payments. Riding on a solid capital position, the company has been hiking dividends, which register a five-year CAGR (2014-2019) of nearly 12.1%. Such shareholder-friendly moves make it an attractive pick for yield-seeking investors. Its dividend yield of 1.9% appears attractive compared with the industry’s 0.5%.
However, shares of this Zacks Rank #3 (Hold) company have depreciated 24.5% in a year’s time compared with the industry’s fall of 17.8%. Escalating expenses are likely to strain margin expansion.
Nevertheless, we believe the company’s healthy fundamentals will drive its shares in the days to come.
Stocks to Consider
Some better-ranked stocks in the same space are Axis Capital Holdings Limited (AXS - Free Report) , First American Financial Corporation (FAF - Free Report) , and RLI Corp. (RLI - Free Report) . While First American Financial and RLI sport a Zacks Rank #1 (Strong Buy), Axis Capital carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
All three companies surpassed estimates in the last reported quarter by 150%, 33.33% and 28.57%, respectively.
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Selective Insurance Group, Inc. (SIGI - Free Report) has been riding on improved premium growth and strong net investment income, which is aiding its top line.
The company has a decent surprise history. It beat estimates in two of the trailing four quarters, the average beat being 5.9%. The stock has seen the Zacks Consensus Estimate being revised 3.2% downward over the last 60 days for current-quarter earnings.
Let’s delve into the factors that bode well for the company.
The P&C insurer continues to ride on geographic expansion for growth and diversification. Constant premium growth across segments helped the company’s total premiums improve 6.6% year over year in 2019. This upside can be attributed to strong retention and new business in the Standard Commercial Lines segment. As a result, the company’s top line registered 10.1% year-over-year growth in 2019.
Selective Insurance banks on impressive investment results. Its net investment income climbed 13% in 2019, driven by active portfolio management and a stellar operating cash flow. For 2020, the firm projects an after-tax investment income of $185 million, up from the prior guidance of $175 million.
The company also flaunts a sound capital structure, and remains committed toward returning value to its policyholders and shareholders via dividend payments. Riding on a solid capital position, the company has been hiking dividends, which register a five-year CAGR (2014-2019) of nearly 12.1%. Such shareholder-friendly moves make it an attractive pick for yield-seeking investors. Its dividend yield of 1.9% appears attractive compared with the industry’s 0.5%.
However, shares of this Zacks Rank #3 (Hold) company have depreciated 24.5% in a year’s time compared with the industry’s fall of 17.8%. Escalating expenses are likely to strain margin expansion.
Nevertheless, we believe the company’s healthy fundamentals will drive its shares in the days to come.
Stocks to Consider
Some better-ranked stocks in the same space are Axis Capital Holdings Limited (AXS - Free Report) , First American Financial Corporation (FAF - Free Report) , and RLI Corp. (RLI - Free Report) . While First American Financial and RLI sport a Zacks Rank #1 (Strong Buy), Axis Capital carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
All three companies surpassed estimates in the last reported quarter by 150%, 33.33% and 28.57%, respectively.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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