Back to top

Image: Bigstock

Assurant (AIZ) Gains 17% YTD: Can It Retain the Momentum?

Read MoreHide Full Article

Shares of Assurant Inc. (AIZ - Free Report) have gained 16.6% year to date compared with the industry’s growth of 7.8%. With a market capitalization of $9.3 billion, the average volume of Assurant’s shares traded in the last three months was 0.3 million.

Zacks Investment Research
Image Source: Zacks Investment Research

Strong performing Global Lifestyle business, growing the fee-based capital-light businesses and solid capital management continue to drive Assurant.

It has a decent track record of beating earnings estimates, having done so in three of the last four quarters, missing in one, delivering an earnings surprise of 20.90%, on average.

Will the Bullish Run Continue?

The Zacks Consensus Estimate for 2021 earnings indicates a year-over-year improvement of 11.7% while the same for 2022 indicates a year-over-year improvement of 26%. Assurant estimated net operating income per share, excluding catastrophes, to grow 9% in 2021. The expected long-term earnings growth rate is pegged at 17.8%, better than the industry average of 13.2%

Earnings at Global Lifestyle should benefit from mobile business and will mainly come from new and expanded programs as well as contribution from recent acquisitions. For 2021, Assurant projects net operating income of Global Lifestyle to grow in high single digits driven by the solid performance of all lines of business, particularly Connected Living. Adjusted EBITDA for this segment is projected to grow in double digits year over year.

Leveraging innovative products and services and adding new partnerships with leading brands, this Zacks Rank #3 (Hold) global provider of risk management solutions in the housing and lifestyle markets remains focused on ramping up the Connected Living platform. Management estimates to double the margins in Connected Living to 8% over the long term.

It divestiture of Global Preneed business will help it intensify focus on connected world businesses and specialty property and casualty offerings. This also marks a step forward toward intensifying focus on market-leading lifestyle and housing businesses.

Assurant is also focused on growing the fee-based capital-light businesses that presently consist of 52% segmental revenues. It estimates the contribution to continue growing in double digits over the longer term.

This Zacks Rank #3 (Hold) has a strong capital management policy in place.  While It has been increasing dividends for the last 16 straight years, the company has $1.45 billion remaining under its current share buyback authorization.

Stocks to Consider

Some better-ranked stocks in the same space include American International Group (AIG - Free Report) , CNO Financial Group (CNO - Free Report) , and MetLife (MET - Free Report) .
AIG delivered an earnings surprise of 27.73% in the last reported quarter. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CNO Financial delivered an earnings surprise of 22.22% in the last reported quarter. It carries a Zacks Rank #2.

MetLife delivered an earnings surprise of 47.20% in the last reported quarter. It carries a Zacks Rank #2.