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Here's Why Investors May Bet on W.R. Berkley (WRB) Stock
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W.R. Berkley Corporation (WRB - Free Report) has been in investors' good books on the back of higher income from investment funds, higher premiums and effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings per share is pegged at $3.91 and $4.30, indicating a year-over-year increase of 15% and 9.9%, respectively. The expected long-term earnings growth rate is pegged at 9%.
Northbound Estimate Revision
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings has moved 6.5% and 5.1% north in the past 60 days. This should instill investors' confidence in the stock.
Earnings Surprise History
W.R. Berkley has a decent earnings surprise history. It beat estimates in each of the last four quarters, with the average being 27.08%.
Zacks Rank & Price Performance
W.R. Berkley currently has a Zacks Rank #1 (Strong Buy). In the past year, the stock has rallied 34.8%, outperforming the industry’s increase of 8.9%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
W.R. Berkley’s trailing 12-month return on equity (ROE) of 15.8% reflects its growth potential. It compares favorably with the industry average of 5.8% and expanded 760 basis points year over year. ROE reflects its efficiency in using its shareholders’ funds.
Business Tailwinds
The Insurance business of W.R. Berkley is likely to gain from higher premiums at other liability, professional liability, short-tail lines, commercial auto and workers' compensation, rate increases, several new startup units in varied business lines, benefits derived from market dislocations and high retention.
By virtue of an increase in equity securities, arbitrage trading account, higher income from fixed maturity securities, increase in real estate and higher income from investment funds, net investment income is expected to increase in the long run.
The underwriting profitability is likely to benefit from growth in premium rates and exposure as well as reductions in loss ratio.
Continued growth in premiums and expansion in underwriting profits are likely to boost the operations of the insurer.
In June 2022, W.R. Berkley approved a 15.3% hike in its quarterly dividend and also approved a special cash dividend of 50 cents per share. This marked the 17th consecutive increase since 2005, while the special dividend marked the 14th such payout in the last 13 years. Its current dividend yield of 0.5% is better than the industry average of 0.3%, which makes WRB stock an attractive pick for yield-seeking investors.
RLI’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 45.89%. In the past year, RLI has increased 5.7%.
The Zacks Consensus Estimate for RLI’s 2022 earnings has moved 0.7% north 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 rallied 5.9%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 9.8% and 6.9% 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 31.5%.
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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Here's Why Investors May Bet on W.R. Berkley (WRB) Stock
W.R. Berkley Corporation (WRB - Free Report) has been in investors' good books on the back of higher income from investment funds, higher premiums and effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings per share is pegged at $3.91 and $4.30, indicating a year-over-year increase of 15% and 9.9%, respectively. The expected long-term earnings growth rate is pegged at 9%.
Northbound Estimate Revision
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings has moved 6.5% and 5.1% north in the past 60 days. This should instill investors' confidence in the stock.
Earnings Surprise History
W.R. Berkley has a decent earnings surprise history. It beat estimates in each of the last four quarters, with the average being 27.08%.
Zacks Rank & Price Performance
W.R. Berkley currently has a Zacks Rank #1 (Strong Buy). In the past year, the stock has rallied 34.8%, outperforming the industry’s increase of 8.9%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
W.R. Berkley’s trailing 12-month return on equity (ROE) of 15.8% reflects its growth potential. It compares favorably with the industry average of 5.8% and expanded 760 basis points year over year. ROE reflects its efficiency in using its shareholders’ funds.
Business Tailwinds
The Insurance business of W.R. Berkley is likely to gain from higher premiums at other liability, professional liability, short-tail lines, commercial auto and workers' compensation, rate increases, several new startup units in varied business lines, benefits derived from market dislocations and high retention.
By virtue of an increase in equity securities, arbitrage trading account, higher income from fixed maturity securities, increase in real estate and higher income from investment funds, net investment income is expected to increase in the long run.
The underwriting profitability is likely to benefit from growth in premium rates and exposure as well as reductions in loss ratio.
Continued growth in premiums and expansion in underwriting profits are likely to boost the operations of the insurer.
In June 2022, W.R. Berkley approved a 15.3% hike in its quarterly dividend and also approved a special cash dividend of 50 cents per share. This marked the 17th consecutive increase since 2005, while the special dividend marked the 14th such payout in the last 13 years. Its current dividend yield of 0.5% is better than the industry average of 0.3%, which makes WRB stock an attractive pick for yield-seeking investors.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are RLI Corp. (RLI - Free Report) , American Financial Group, Inc. (AFG - Free Report) and HCI Group, Inc. (HCI - Free Report) . While RLI and American Financial sport a Zacks Rank #1, HCI Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
RLI’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 45.89%. In the past year, RLI has increased 5.7%.
The Zacks Consensus Estimate for RLI’s 2022 earnings has moved 0.7% north 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 rallied 5.9%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 9.8% and 6.9% 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 31.5%.
The Zacks Consensus Estimate for HCI’s 2022 and 2023 earnings per share indicates year-over-year increases of 280.9% and 75%, respectively.