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Should You Retain Assurant (AIZ) Stock in Your Portfolio?

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Assurant, Inc. (AIZ - Free Report) has been benefiting from higher mobile subscriber growth and higher mobile trade-in volumes, strategic acquisitions and effective capital deployment.

Growth Projections

The Zacks Consensus Estimate for Assurant’s 2022 earnings per share is pegged at $11.9, indicating year-over-year increases of 29.7%. The expected long-term earnings growth rate is 17.2%, higher than the industry average of 12.5%.

Earnings Surprise History

Assurant has a decent earnings surprise history. It beat estimates in three of the last four quarters and missed in one, with the average being 12.06%.

Zacks Rank & Price Performance

Assurant currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 10.5%, outperforming the industry’s increase of 3.9%.

Zacks Investment ResearchImage Source: Zacks Investment Research

Business Tailwinds

Solid performances across the company’s Global Housing, Global Lifestyle segments have been driving Assurant’s revenues, which witnessed a CAGR of 6% over the last five years (2016-2020).

Continued growth in Global Automotive and Connected Living, higher investment income and underlying global growth are expected to fuel the performance of the Global Lifestyle segment. Global Automotive and Connected Living businesses are likely to support the long-term focus on higher growth fee-based and capital-light businesses.

While Connected Living is likely to gain from mobile subscriber growth and higher mobile trade-in volumes, including contributions from recent acquisitions, Global Automotive will likely benefit from organic global growth, higher investment income and lower claims activity.

Earnings at Global Lifestyle should benefit from mobile business and will mainly come from new and expanded programs as well as a contribution from recent acquisitions.

Assurant partners with leading brands to develop innovative products and services, and deliver an enhanced customer experience. Through partnerships with mobile carriers, Assurant provides administrative services related to its mobile device protection products including customer support and claims handling, service delivery besides repair and logistics among others.

AIZ has adopted inorganic and organic growth strategies to boost the Global Lifestyle segment. The acquisitions are expected to enhance Assurant’s businesses, strengthen its product capabilities and boost customer experience. The buyouts have added scale and technology capabilities to global trade-in and upgraded business, and boosted its mobile device trading and repair and logistics capabilities in the Asia Pacific. Also, these buyouts have improved Assurant’s connected-home strategy in Japan and enhanced the use of mobile devices, electronics and home appliances.

In the first quarter of 2022, Assurant expanded its partnership with the Telefonica Group. This partnership is expected to expand the range of products and services that Assurant offers and thus boost this multi-line insurer’s capability to offer an enhanced customer experience, innovate and promote sustainable practices.

This multiline insurer exited the third quarter with liquidity of $1.3 billion, which remains $1.1 billion higher than the insurer’s current targeted minimum level of $225 million.

In November 2021, Assurant hiked its quarterly dividend by 3%. At present, AIZ has around $1.13 billion of remaining repurchase authorization. Assurant estimates a higher-than-usual level of buybacks throughout the remainder of the year and into 2022 as it expects to return $900 million in net proceeds from the sale of Global Preneed within the next 12 months.

Stocks to Consider

Some better-ranked stocks from the multi-line insurance space include Enact Holdings (ACT - Free Report) , MGIC Investment (MTG - Free Report) and Radian Group (RDN - Free Report) , each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Enact Holdings’ earnings surpassed estimates in each of the last four quarters, the average beat being 5%. In the past year, ACT has gained 9%.

The Zacks Consensus Estimate for Enact Holdings’ 2022 earnings has moved 9.6% north in the past 60 days. Enact Holdings’ expected long-term earnings growth rate is pegged at 11.1%.

In the past year, MGIC Investment has rallied 22.7%. The Zacks Consensus Estimate for MTG 2022 earnings has moved 6.7% north in the past 60 days.

The Zacks Consensus Estimate for MTG’s 2022 earnings implies 17.6% year-over-year growth.

The bottom line of Radian surpassed estimates in three of the last four quarters and missed in one, the average being 1.64%. In the past year, RDN has rallied 8.7%.

The Zacks Consensus Estimate for Radian’s 2022 earnings has moved 5.6% north in the past 60 days.