Axis Capital Holdings’ ( AXS Quick Quote AXS - Free Report) focus on building Specialty Insurance, Reinsurance as well as Accident and Health insurance portfolio, strong market presence, better pricing, margin expansion, effective capital deployment along with favorable growth estimates make it a good investment choice. This leading specialty insurer and a global reinsurer, aiming for leadership in specialty risks, has a solid track record of beating estimates in the last eight quarters. Annualized return on average common equity was 11.8% in the first quarter, outperforming the year-ago figure of 2%. The industry average was 5.6%.- This insurer has an impressive VGM Score of A. This helps to identify stocks with the most attractive value, growth and momentum. Zacks Rank & Price Performance
Axis Capital currently carries a Zacks Rank #2 (Buy). Year to date, the stock has gained 3.8%, outperforming the
industry’s increase of 1.3%. The Finance sector and the S&P 500 composite index have lost 14.7% and 18.6%, respectively, in the said time frame. Image Source: Zacks Investment Research Optimistic Growth Projections
The Zacks Consensus Estimate for Axis Capital’s 2022 earnings is pegged at $6.18, indicating a 20.7% increase from the year-ago reported figure on 3.2% higher revenues of $5.4 billion. The consensus estimate for 2023 earnings stands at $6.61, indicating a 6.9% increase from the year-ago reported figure on 8.6% higher revenues of $5.8 billion.
The long-term earnings growth rate is currently pegged at 5%. It has a Growth Score of B. Northbound Estimate Revision
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 15.5% and 4.4% north in the past 30 days, reflecting analyst optimism.
Axis Capital’s focus on repositioning its portfolio, lower volatility and focus on markets offering profitable growth bodes well.
AXS remains focused on business lines that are likely to provide solid double-digit ROE opportunities. Thus, AXIS Capital is growing its verticals into 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. AXIS Capital eyes a low-90s combined ratio to fuel attractive ROE and has a $100 million share buyback program under its authorization to return value to shareholders. The insurance industry has been witnessing accelerated digitalization and AXIS Capital is no exception. AXS has made investments in a technology that enables effective usage of data, aids higher-value processes and activities, supports new lines of business, and operates efficiently. AXIS Capital expects disciplined pricing to persist in both insurance and reinsurance through 2023. Impressive 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. Attractive Valuation
AXS shares are trading at a discount than the industry average. Its price to book value of 1.06X is lower than the industry average of 1.27X. Before valuation expands, it is preferable to take a position in the stock.
The stock carries an impressive Value Score of A. Value Score helps find stocks that are undervalued. Back-tested results have shown that stocks with a favorable Value Score, when combined with a solid Zacks, Rank are the best investment bets. Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance sector are
RLI Corp. ( RLI Quick Quote RLI - Free Report) , Cincinnati Financial Corporation ( CINF Quick Quote CINF - Free Report) and American Financial Group, Inc. ( AFG Quick Quote AFG - Free Report) . each currently sporting a Zacks Rank #1 (Strong Buy). You can see . the complete list of today’s Zacks #1 Rank stocks here RLI has a solid track record of beating earnings estimates in each of the last seven quarters. In the past year, RLI stock has increased 10.5%. The Zacks Consensus Estimate for RLI’s 2022 and 2023 earnings per share is pegged at $4.35 and $4.45, indicating year-over-year increases of 12.4% and 2.3%, respectively. Cincinnati Financial’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 32.55%. In the past year, Cincinnati Financial 's stock has increased 8.1%. The Zacks Consensus Estimate for CINF’s 2022 and 2023 earnings has moved 3.6% and 1.7% north, respectively, in the past 30 days. American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 41.72%. In the past year, American Financial has lost 0.3%. The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 9.8% and 6.9% north, respectively, in the past 30 days.