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Here's Why Hold is an Apt Strategy for Chubb (CB) Stock Now
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Chubb (CB - Free Report) is well-poised for growth given strategic investments, impressive inorganic growth, global presence, growth initiatives, effective capital deployment as well as strong capital and liquidity position.
Its operating earnings grew 68% in the last 11 years (2009-2019), better than its peers’ average of 40% over the same time. The expected long-term earnings growth rate is pegged at 10%, better than the industry average of 8.8%.
Chubb’s net premiums written has grown, better than its peer average. We expect the momentum to continue driven by its compelling product portfolio, solid retention, improved pricing, prudent underwriting, and solid global presence. Boasting.one of the world’s largest providers of property and casualty insurance and reinsurance, this Zacks Rank #3 (Hold) insurer remains well positioned to capitalize on the potential of middle-market businesses. It is also focusing on cyber insurance that has immense room for growth.
Though it has exposure to catastrophe loss, leveraging its underwing prudence, the company remains focused on delivering industry-leading combined ratio. Its combined ratio is about 800 bps better than its peers’ average over the past 10 years.
Chubb expects strong cash flow to continue to support net investment income and estimates adjusted net investment income run rate to be in the range of $850 million to $860 million.
The company remains committed to enhance its shareholders value. Beside share buybacks, it has increased its dividend for 27 straight years, currently yielding 2.1%, better than the industry average of 0.4%. Chubb also has a $1.5 billion share buyback program.
Though its debt level has increased, its times interest earned has been improving, which implies that Chubb will be able to meet current obligations without any difficulties.
Shares of Chubb have lost 3.5% year to date, narrower than the industry's decline of 3.8%. The Zacks Consensus Estimate for 2021 indicates 61.5% year-over-year increase. The consensus estimate has risen 5.2% in the past 60 days, reflecting analyst optimism.
Moreover, its average return on equity (2010–2019) was 10.6%, better than the peer average of 8.9%, reflecting effective utilization of shareholders fund. It envisions double-digit return on equity over time.
Stocks to Consider
Some better-ranked companies from the same space are Alleghany , The Hanover Insurance Group (THG - Free Report) and American Financial Group (AFG - Free Report) .
Alleghany delivered an earnings surprise of 195.85% in the last reported quarter. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank.
The Hanover Insurance Group delivered an earnings surprise of 9.85% in the last reported quarter. It currently carries a Zacks Rank #2 (Buy).
American Financial delivered an earnings surprise of 58.06% in the last reported quarter. It currently carries a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
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Here's Why Hold is an Apt Strategy for Chubb (CB) Stock Now
Chubb (CB - Free Report) is well-poised for growth given strategic investments, impressive inorganic growth, global presence, growth initiatives, effective capital deployment as well as strong capital and liquidity position.
Its operating earnings grew 68% in the last 11 years (2009-2019), better than its peers’ average of 40% over the same time. The expected long-term earnings growth rate is pegged at 10%, better than the industry average of 8.8%.
Chubb’s net premiums written has grown, better than its peer average. We expect the momentum to continue driven by its compelling product portfolio, solid retention, improved pricing, prudent underwriting, and solid global presence. Boasting.one of the world’s largest providers of property and casualty insurance and reinsurance, this Zacks Rank #3 (Hold) insurer remains well positioned to capitalize on the potential of middle-market businesses. It is also focusing on cyber insurance that has immense room for growth.
Though it has exposure to catastrophe loss, leveraging its underwing prudence, the company remains focused on delivering industry-leading combined ratio. Its combined ratio is about 800 bps better than its peers’ average over the past 10 years.
Chubb expects strong cash flow to continue to support net investment income and estimates adjusted net investment income run rate to be in the range of $850 million to $860 million.
The company remains committed to enhance its shareholders value. Beside share buybacks, it has increased its dividend for 27 straight years, currently yielding 2.1%, better than the industry average of 0.4%. Chubb also has a $1.5 billion share buyback program.
Though its debt level has increased, its times interest earned has been improving, which implies that Chubb will be able to meet current obligations without any difficulties.
Shares of Chubb have lost 3.5% year to date, narrower than the industry's decline of 3.8%. The Zacks Consensus Estimate for 2021 indicates 61.5% year-over-year increase. The consensus estimate has risen 5.2% in the past 60 days, reflecting analyst optimism.
Moreover, its average return on equity (2010–2019) was 10.6%, better than the peer average of 8.9%, reflecting effective utilization of shareholders fund. It envisions double-digit return on equity over time.
Stocks to Consider
Some better-ranked companies from the same space are Alleghany , The Hanover Insurance Group (THG - Free Report) and American Financial Group (AFG - Free Report) .
Alleghany delivered an earnings surprise of 195.85% in the last reported quarter. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank.
The Hanover Insurance Group delivered an earnings surprise of 9.85% in the last reported quarter. It currently carries a Zacks Rank #2 (Buy).
American Financial delivered an earnings surprise of 58.06% in the last reported quarter. It currently carries a Zacks Rank #2.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>