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Markel (MKL) Up 25.8% in a Year: Can it Maintain the Upside?
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Shares of Markel Corporation (MKL - Free Report) have rallied 25.8% in a year compared with the industry's increase of 18.3%. The Zacks S&P 500 composite has rallied 13% in the said time frame. With a market capitalization of $20 billion, the average volume of shares traded in the last three months was 0.06 million.
Image Source: Zacks Investment Research
The rally was largely driven by growth in new business, strategic buyouts and sufficient liquidity.
The insurer has a decent earnings surprise history. Its bottom line beat estimates in two of the last four quarters and missed in the other two, the average being 3.59%.
Markel has a favorable VGM Score of B. VGM Score helps to identify stocks with the most attractive value, the best growth and the most promising momentum.
Can MKL Stock Retain the Momentum?
Estimates for 2022 and 2023 have moved up nearly 1% and 3.2%, respectively, in the past 30 days, reflecting investors’ optimism.
The Zacks Consensus Estimate for Markel’s 2022 and 2023 earnings per share is pegged at $76.29 and $88.18, indicating a year-over-year increase of 29.1% and 15.6%, respectively.
Riding on solid growth in new business, ongoing favorable pricing trends across most of the product lines, especially within the professional liability and general liability product lines in both the Insurance and Reinsurance segments, premium growth in the professional liability and general liability product lines are likely to improve in the long run.
Higher premium volumes are likely to boost the revenue growth of this property and casualty insurer.
The Zacks Consensus Estimate for 2022 and 2023 revenues is pegged at $12 billion and $13 billion, respectively, indicating a year-over-year increase of nearly 10.6% and 8.3%.
Markel continues to witness new business opportunities along with a strong rating environment.
Markel considers strategic buyouts a prudent approach to ramp up the growth profile. Such acquisitions have helped the insurer not only enhance its surety capabilities but also ramp up Markel Ventures’ revenues and expand its reinsurance product offerings.
In December 2021, MKL agreed with Metromont LLC to purchase its majority interest. With this latest addition to the portfolio, MKL will be able to gain from Metromont’s solid reputation in the market and its know-how in the precast concrete industry.
This Zacks Rank #3 (Hold) insurer’s trailing 12-month return on equity (ROE) was 6%, which expanded 230 basis points year over year. ROE reflects its efficiency in using its shareholders’ funds.
By virtue of higher net earned premiums, lower compensation costs and increased efficiency, the expense ratio is likely to improve in the long run.
Markel seeks to maintain prudent levels of liquidity and financial leverage. Higher premium volume in the Insurance segment should benefit the operating cash flows of the insurer.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance sector are United Fire Group, Inc. (UFCS - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) and American Financial Group, Inc. (AFG - Free Report) . While United Fire currently sports a Zacks Rank #1 (Strong Buy), Kinsale Capital and American Financial Group carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, the UFCS stock has declined 11.5%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 60 days.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. In the past year, Kinsale Capital has rallied 36.5%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings has moved 5.9% and 8.2% north, respectively, in the past 60 days.
The bottom line of American Financial surpassed earnings estimates in each of the last four quarters, the average being 39.58%. In the past year, the insurer has rallied 24.2%.
The Zacks Consensus Estimate for American Financial’s 2022 and 2023 earnings has moved 3.3% and 8.2% north, respectively, in the past 60 days.
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Markel (MKL) Up 25.8% in a Year: Can it Maintain the Upside?
Shares of Markel Corporation (MKL - Free Report) have rallied 25.8% in a year compared with the industry's increase of 18.3%. The Zacks S&P 500 composite has rallied 13% in the said time frame. With a market capitalization of $20 billion, the average volume of shares traded in the last three months was 0.06 million.
Image Source: Zacks Investment Research
The rally was largely driven by growth in new business, strategic buyouts and sufficient liquidity.
The insurer has a decent earnings surprise history. Its bottom line beat estimates in two of the last four quarters and missed in the other two, the average being 3.59%.
Markel has a favorable VGM Score of B. VGM Score helps to identify stocks with the most attractive value, the best growth and the most promising momentum.
Can MKL Stock Retain the Momentum?
Estimates for 2022 and 2023 have moved up nearly 1% and 3.2%, respectively, in the past 30 days, reflecting investors’ optimism.
The Zacks Consensus Estimate for Markel’s 2022 and 2023 earnings per share is pegged at $76.29 and $88.18, indicating a year-over-year increase of 29.1% and 15.6%, respectively.
Riding on solid growth in new business, ongoing favorable pricing trends across most of the product lines, especially within the professional liability and general liability product lines in both the Insurance and Reinsurance segments, premium growth in the professional liability and general liability product lines are likely to improve in the long run.
Higher premium volumes are likely to boost the revenue growth of this property and casualty insurer.
The Zacks Consensus Estimate for 2022 and 2023 revenues is pegged at $12 billion and $13 billion, respectively, indicating a year-over-year increase of nearly 10.6% and 8.3%.
Markel continues to witness new business opportunities along with a strong rating environment.
Markel considers strategic buyouts a prudent approach to ramp up the growth profile. Such acquisitions have helped the insurer not only enhance its surety capabilities but also ramp up Markel Ventures’ revenues and expand its reinsurance product offerings.
In December 2021, MKL agreed with Metromont LLC to purchase its majority interest. With this latest addition to the portfolio, MKL will be able to gain from Metromont’s solid reputation in the market and its know-how in the precast concrete industry.
This Zacks Rank #3 (Hold) insurer’s trailing 12-month return on equity (ROE) was 6%, which expanded 230 basis points year over year. ROE reflects its efficiency in using its shareholders’ funds.
By virtue of higher net earned premiums, lower compensation costs and increased efficiency, the expense ratio is likely to improve in the long run.
Markel seeks to maintain prudent levels of liquidity and financial leverage. Higher premium volume in the Insurance segment should benefit the operating cash flows of the insurer.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance sector are United Fire Group, Inc. (UFCS - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) and American Financial Group, Inc. (AFG - Free Report) . While United Fire currently sports a Zacks Rank #1 (Strong Buy), Kinsale Capital and American Financial Group carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, the UFCS stock has declined 11.5%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 60 days.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. In the past year, Kinsale Capital has rallied 36.5%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings has moved 5.9% and 8.2% north, respectively, in the past 60 days.
The bottom line of American Financial surpassed earnings estimates in each of the last four quarters, the average being 39.58%. In the past year, the insurer has rallied 24.2%.
The Zacks Consensus Estimate for American Financial’s 2022 and 2023 earnings has moved 3.3% and 8.2% north, respectively, in the past 60 days.