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Here's Why Hold is an Apt Strategy for AXIS Capital (AXS)
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AXIS Capital Holdings Limited’s (AXS - Free Report) focus on building Specialty Insurance, Reinsurance as well as Accident and Health insurance portfolio, strong market presence, better pricing, and margin expansion along with favorable growth estimates make it worth retaining in one’s portfolio.
This insurer has a solid track record of beating earnings estimates in the last seven quarters.
Zacks Rank & Price Performance
AXIS Capital currently carries a Zacks Rank #3 (Hold). Over the past year, the stock has gained 5.9% compared with the industry’s increase of 13%.
Image Source: Zacks Investment Research
Growth Projections
The Zacks Consensus Estimate for AXIS Capital’s 2022 earnings is pegged at $5.60, indicating a 9.4% increase from the year-ago reported figure on 5.9% higher revenues of $5.5 billion. The consensus estimate for 2023 earnings is pegged at $6.26, indicating an 18.4% increase from the year-ago reported figure on 6.9% higher revenues of $5.9 billion. The long-term earnings growth rate is currently pegged at 5%. AXIS Capital has a favorable Growth Score of A.
Return on Equity (ROE)
Annualized return on average common equity was 12.2% in 2021 against the year-ago figure of negative 3.2%. The industry average was 5.6%.
Estimate Revision
The Zacks Consensus Estimate for 2022 has moved north by 0.9% in the last 60 days, reflecting analyst optimism.
AXIS Capital continues to build on its Specialty Insurance, Reinsurance and Accident and Health portfolio, thereby improving portfolio mix. This leading specialty insurer and a global reinsurer aims for leadership in specialty risks.
The insurer remains focused on business lines, which are likely to provide strong double-digit ROE opportunities. AXIS Capital is thus strategically growing pet insurance, marine cargo, cyber and renewable energy insurance businesses.
Rate improvement, prudent underwriting and PML reductions supported by third-party capital are likely to fuel improved risk-adjusted return. AXIS Capital remains focused on driving margin expansion.
The fourth quarter of 2021 marked the 17th straight quarter of rate increases and the seventh straight quarter of double-digit rate increases. The insurer expects low interest rates, lower levels of favorable development, social inflation and the COVID-19 pandemic to drive further pricing improvements through 2022 and beyond.
AXIS Capital eyes a low-90s combined ratio to fuel attractive ROE.
Solid Dividend History
AXIS Capital has been hiking dividends for the last 18 years, at a nine-year CAGR (2013 – 2021) of 5.9%, driven by solid earnings. Its dividend yield is currently 3%, way above the industry average of 0.3%. AXS boasts one of the highest dividend yields among its peers.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. In the past year, KNSL has rallied 26.5%.
The Zacks Consensus Estimate for Kinsale Capital’s 2022 and 2023 earnings has moved 3.8% and 3.5% north, respectively, in the past seven days.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, UFCS has lost 16.1%.
The Zacks Consensus Estimate for United Fire’s 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 30 days.
The bottom line of Cincinnati Financial surpassed estimates in each of the last four quarters, the average being 38.48%. In the past year, the insurer has rallied 18.8%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 30 days.
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Here's Why Hold is an Apt Strategy for AXIS Capital (AXS)
AXIS Capital Holdings Limited’s (AXS - Free Report) focus on building Specialty Insurance, Reinsurance as well as Accident and Health insurance portfolio, strong market presence, better pricing, and margin expansion along with favorable growth estimates make it worth retaining in one’s portfolio.
This insurer has a solid track record of beating earnings estimates in the last seven quarters.
Zacks Rank & Price Performance
AXIS Capital currently carries a Zacks Rank #3 (Hold). Over the past year, the stock has gained 5.9% compared with the industry’s increase of 13%.
Image Source: Zacks Investment Research
Growth Projections
The Zacks Consensus Estimate for AXIS Capital’s 2022 earnings is pegged at $5.60, indicating a 9.4% increase from the year-ago reported figure on 5.9% higher revenues of $5.5 billion. The consensus estimate for 2023 earnings is pegged at $6.26, indicating an 18.4% increase from the year-ago reported figure on 6.9% higher revenues of $5.9 billion. The long-term earnings growth rate is currently pegged at 5%. AXIS Capital has a favorable Growth Score of A.
Return on Equity (ROE)
Annualized return on average common equity was 12.2% in 2021 against the year-ago figure of negative 3.2%. The industry average was 5.6%.
Estimate Revision
The Zacks Consensus Estimate for 2022 has moved north by 0.9% in the last 60 days, reflecting analyst optimism.
Style Score
AXIS Capital has a favorable VGM Score of A.
Business Tailwinds
AXIS Capital continues to build on its Specialty Insurance, Reinsurance and Accident and Health portfolio, thereby improving portfolio mix. This leading specialty insurer and a global reinsurer aims for leadership in specialty risks.
The insurer remains focused on business lines, which are likely to provide strong double-digit ROE opportunities. AXIS Capital is thus strategically growing pet insurance, marine cargo, cyber and renewable energy insurance businesses.
Rate improvement, prudent underwriting and PML reductions supported by third-party capital are likely to fuel improved risk-adjusted return. AXIS Capital remains focused on driving margin expansion.
The fourth quarter of 2021 marked the 17th straight quarter of rate increases and the seventh straight quarter of double-digit rate increases. The insurer expects low interest rates, lower levels of favorable development, social inflation and the COVID-19 pandemic to drive further pricing improvements through 2022 and beyond.
AXIS Capital eyes a low-90s combined ratio to fuel attractive ROE.
Solid Dividend History
AXIS Capital has been hiking dividends for the last 18 years, at a nine-year CAGR (2013 – 2021) of 5.9%, driven by solid earnings. Its dividend yield is currently 3%, way above the industry average of 0.3%. AXS boasts one of the highest dividend yields among its peers.
Stocks to Consider
Some better-ranked insurers include Kinsale Capital Group (KNSL - Free Report) , United Fire Group (UFCS - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. In the past year, KNSL has rallied 26.5%.
The Zacks Consensus Estimate for Kinsale Capital’s 2022 and 2023 earnings has moved 3.8% and 3.5% north, respectively, in the past seven days.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, UFCS has lost 16.1%.
The Zacks Consensus Estimate for United Fire’s 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 30 days.
The bottom line of Cincinnati Financial surpassed estimates in each of the last four quarters, the average being 38.48%. In the past year, the insurer has rallied 18.8%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 30 days.