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Should You Retain Selective Insurance (SIGI) Stock For Now?
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Selective Insurance Group, Inc. (SIGI - Free Report) is well poised for growth on the back of stable retention, higher direct new business, renewal pure price and exposure growth.
Earnings Surprise History
Selective Insurance has a solid track record of beating earnings estimates in six of the last seven quarters.
Zacks Rank & Price Performance
Selective Insurance currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 1.9% against the industry’s decrease of 7.5%.
Image Source: Zacks Investment Research
Style Score
Selective Insurance is well poised for progress, as is evident from its favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Return on Equity (ROE)
Selective Insurance’s ROE for the trailing 12 months is 13.8%, up 130 basis points year over year. This reflects its efficiency in utilizing shareholders’ funds.
Business Tailwinds
Strong new business growth, stable retention, solid renewal pure price increases, and exposure growth are expected to drive solid results in the Commercial Lines segment of Selective Insurance.
The Excess and Surplus Lines (E&S) segment of Selective Insurance is likely to improve due to higher direct new business, renewal pure price, and exposure growth, driven by favorable market conditions in E&S lines.
For 2022, Selective Insurance projects an investment income of $205 million (upped from the earlier guidance of $200 million). It includes $15 million in net investment income from alternative investments. Higher income earned on fixed-income securities and other investments are likely to drive investment income.
These tailwinds are expected to boost the top-line growth of the insurer. The Zacks Consensus Estimate for Selective Insurance’s 2023 revenues is pegged at $4 billion, indicating a year-over-year increase of nearly 44.5%.
The expense ratio is likely to improve owing to lower-than-expected travel and entertainment, overhead and general and administrative expenses.
Selective Insurance boasts an impressive solvency level. Its financial position remains solid with $518 million of cash and investments, which is above the longer-term target. Solid financial flexibility provides SIGI with better growth opportunities.
Selective Insurance raised dividends at an eight-year (2015-2022) CAGR of 9.1%. The current dividend yield is 1.5%, which is better than the industry average of 0.4%. SIGI had $96.5 million remaining under repurchase authorization. Thus, the stock is an attractive pick for yield-seeking investors.
RLI Corp.’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 45.89%. In the past year, RLI Corp. has increased 7.7%.
The Zacks Consensus Estimate for RLI’s 2022 earnings has moved 0.7% north in the past 30 days.
W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.08%. In the past year, W.R. Berkley's stock has increased 36.7%.
The Zacks Consensus Estimate for WRB’s 2022 and 2023 earnings has moved 6.3% and 6.2% north, respectively, in the past 60 days.
The Zacks Consensus Estimate for HCI Group’s 2022 and 2023 earnings has moved 33.3% and 40% north, respectively, in the past 60 days. In the past year, HCI Group stock has lost 32.8%.
The Zacks Consensus Estimate for HCI’s 2022 and 2023 earnings per share indicates year-over-year increases of 280.9% and 75%, respectively.
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Should You Retain Selective Insurance (SIGI) Stock For Now?
Selective Insurance Group, Inc. (SIGI - Free Report) is well poised for growth on the back of stable retention, higher direct new business, renewal pure price and exposure growth.
Earnings Surprise History
Selective Insurance has a solid track record of beating earnings estimates in six of the last seven quarters.
Zacks Rank & Price Performance
Selective Insurance currently carries a Zacks Rank #3 (Hold). In the past year, the stock has rallied 1.9% against the industry’s decrease of 7.5%.
Image Source: Zacks Investment Research
Style Score
Selective Insurance is well poised for progress, as is evident from its favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Return on Equity (ROE)
Selective Insurance’s ROE for the trailing 12 months is 13.8%, up 130 basis points year over year. This reflects its efficiency in utilizing shareholders’ funds.
Business Tailwinds
Strong new business growth, stable retention, solid renewal pure price increases, and exposure growth are expected to drive solid results in the Commercial Lines segment of Selective Insurance.
The Excess and Surplus Lines (E&S) segment of Selective Insurance is likely to improve due to higher direct new business, renewal pure price, and exposure growth, driven by favorable market conditions in E&S lines.
For 2022, Selective Insurance projects an investment income of $205 million (upped from the earlier guidance of $200 million). It includes $15 million in net investment income from alternative investments. Higher income earned on fixed-income securities and other investments are likely to drive investment income.
These tailwinds are expected to boost the top-line growth of the insurer. The Zacks Consensus Estimate for Selective Insurance’s 2023 revenues is pegged at $4 billion, indicating a year-over-year increase of nearly 44.5%.
The expense ratio is likely to improve owing to lower-than-expected travel and entertainment, overhead and general and administrative expenses.
Selective Insurance boasts an impressive solvency level. Its financial position remains solid with $518 million of cash and investments, which is above the longer-term target. Solid financial flexibility provides SIGI with better growth opportunities.
Selective Insurance raised dividends at an eight-year (2015-2022) CAGR of 9.1%. The current dividend yield is 1.5%, which is better than the industry average of 0.4%. SIGI had $96.5 million remaining under repurchase authorization. Thus, the stock is an attractive pick for yield-seeking investors.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are RLI Corp. (RLI - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and HCI Group, Inc. (HCI - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
RLI Corp.’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 45.89%. In the past year, RLI Corp. has increased 7.7%.
The Zacks Consensus Estimate for RLI’s 2022 earnings has moved 0.7% north in the past 30 days.
W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.08%. In the past year, W.R. Berkley's stock has increased 36.7%.
The Zacks Consensus Estimate for WRB’s 2022 and 2023 earnings has moved 6.3% and 6.2% north, respectively, in the past 60 days.
The Zacks Consensus Estimate for HCI Group’s 2022 and 2023 earnings has moved 33.3% and 40% north, respectively, in the past 60 days. In the past year, HCI Group stock has lost 32.8%.
The Zacks Consensus Estimate for HCI’s 2022 and 2023 earnings per share indicates year-over-year increases of 280.9% and 75%, respectively.