Assurant Inc. ( AIZ Quick Quote AIZ - Free Report) looks worthy of retention in one’s portfolio on a well-performing Global Lifestyle business, growth in fee-based capital-light businesses and solid capital management along with favorable growth estimates. Assurant has a decent earnings surprise history, having surpassed expectations in the last five quarters. Zacks Rank and Price Performance
Assurant carries a Zacks Rank #3 (Hold). Year to date, shares of Assurant have rallied 12.4% year to date against the
industry’s decrease of 6.4%. The Finance sector and the Zacks S&P 500 composite have declined 17% and 18.2%, respectively in the said time frame. Image Source: Zacks Investment Research Optimistic Growth Projections
The Zacks Consensus Estimate for 2022 earnings is pegged at $12.86, indicating an increase of 37.4% on 5.1% higher revenues of $10.6 billion. The consensus estimate for 2023 earnings is pegged at $14.55, indicating an increase of 13.1% on 6.3% higher revenues of $11.2 billion.
The long-term earnings growth rate is currently pegged at 17.2%, better than the industry average of 11%. Assurant estimates adjusted EPS to grow 16-20% in 2022. It expects more than 12% average annual growth in 2023-2024. Segment-wise, Global Lifestyle is expected to deliver 10% average annual adjusted EBITDA growth in 2023-2024. Corporate and Other is expected to deliver adjusted EBITDA of about ($105 million) in 2022. Assurant estimates about $3 billion in segment cash generation over the next three years. For 2022, Assurant expects 8 to 10% growth in adjusted EBITDA, excluding reportable catastrophes, driven by profitable growth across Global Lifestyle and Global Housing. In Global Housing, for 2022, Assurant expects adjusted EBITDA, excluding reportable catastrophes, to increase by mid-single-digits and mid to high-single-digits in 2023 and 2024, respectively. Business Tailwinds
New and expanded programs and the contribution from recent acquisitions of the mobile business should drive earnings at Global Lifestyle. For 2022, Global Lifestyle adjusted EBITDA is expected to increase in low double digits, driven by mobile in Connected Living and global expansion in existing and new clients across device protection, and trade-in and upgrade programs.
Assurant remains focused on building higher growth fee-based and capital-light businesses, thus continuing to strengthen Global Automotive and Connected Living offerings. Management estimates the contribution to continue to grow in double digits over the longer term. AIZ has a strong capital management policy in place that helps in enhancing shareholders value. While it has been increasing dividends for the last 17 straight years, Assurant has $514 million remaining under its current share buyback authorization. Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are
James River Group ( JRVR Quick Quote JRVR - Free Report) , MGIC Investment ( MTG Quick Quote MTG - Free Report) and Zurich Insurance Group ( ZURVY Quick Quote ZURVY - Free Report) . The Zacks Consensus Estimate for James River Group’s 2022 and 2023 earnings indicates a year-over-year increase 136.1% and 13.2%, respectively. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The Zacks Consensus Estimate for MGIC Investment’s 2022 and 2023 earnings has moved up1.8% and 3.2%, respectively in the past 60 days. It carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for Zurich Insurance Group’s 2022 and 2023 earnings implies a year-over-year increase of 7.5% and 9.6%, respectively. It carries a Zacks Rank #2. Shares of JRVR, MTG and ZURVY have lost 15.9%, 11.1% and 0.3% year to date.