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Reasons Why W.R. Berkley (WRB) Stock is an Attractive Pick
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W.R. Berkley Corporation (WRB - Free Report) has been benefiting from rate increase, international business expansion, high retention and higher income from fixed maturity securities.
Growth Projections
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings per share is pegged at $4.10 and $4.53, indicating a year-over-year increase of 20.6% and 10.4%, 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 earningshas moved 8.7% and 6.8% north, respectively in the past 30 days.This should instill investors' confidence in the stock.
Earnings Surprise History
W.R. Berkley has a decent earnings surprise history. It has a solid track record of beating earnings estimates in each of the last seven quarters.
Zacks Rank & Price Performance
W.R. Berkley currently has a Zacks Rank #1 (Strong Buy). In the past year, the stock has rallied 35%, against the industry’s decrease of 1.1%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
W.R. Berkley’s trailing 12-month return on equity (ROE) of 17.3% reflects its growth potential. It compares favorably with the industry average of 6.4%and expanded 600 basis points year over year. ROE reflects its efficiency in using its shareholders’ funds.
Business Tailwinds
The Insurance business of W.R. Berkley is well poised to grow given higher premiums at other liability, professional liability, short-tail lines, commercial auto and workers' compensation, rate increase, international business expansion, high retention and increased exposure.
Underwriting income should gain from the compounding rate improvement above loss cost trends along with growth in exposure and lower claims frequency in certain lines of business.
Riding on higher income from fixed maturity securities and increase from equity securities, net investment income is expected to increase in the long run.The rising interest rate environment is a key contributor to growth. W.R. Berkley expects investment income to increase as interest rates continue to move higher.
Riding on strong underwriting income, driven by continued growth in premium volume, improving net investment income and foreign currency gains, operating income is expected to rise.
W.R. Berkleyisone of the largest commercial lines property and casualty insurance providers. It has a solid balance sheet with sufficient liquidity and robust cash flows that support growth initiatives and effective capital deployment.
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. The insurer has returned capital to shareholders in the first half of 2022 through regular and special dividends amounting to $182 million. Its current dividend yield of 0.6% is better than the industry average of 0.4%, which makes WRB stock an attractive pick for yield-seeking investors.
The bottom line of Arch Capital surpassed earnings estimates in three of the last four quarters and missed in one, the average being 33.64%. In the past year, the insurer has rallied 14.1%.
The Zacks Consensus Estimate for Arch Capital’s 2022 and 2023 earnings has moved 5.7% and 4.9% north, respectively, in the past 30 days.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 37.09%. In the past year, American Financial has gained 1.5%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 2.2% and 3.3% north, respectively, in the past seven days.
The bottom line of ProAssurance surpassed earnings estimates in three of the last four quarters and missed in one, the average being 150.9%. In the past year, the insurer has lost 5.5%.
The Zacks Consensus Estimate for ProAssurance’s 2022 and 2023 earnings has moved 16.9% and 13.9% north, respectively, in the past seven days.
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Reasons Why W.R. Berkley (WRB) Stock is an Attractive Pick
W.R. Berkley Corporation (WRB - Free Report) has been benefiting from rate increase, international business expansion, high retention and higher income from fixed maturity securities.
Growth Projections
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings per share is pegged at $4.10 and $4.53, indicating a year-over-year increase of 20.6% and 10.4%, 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 earningshas moved 8.7% and 6.8% north, respectively in the past 30 days.This should instill investors' confidence in the stock.
Earnings Surprise History
W.R. Berkley has a decent earnings surprise history. It has a solid track record of beating earnings estimates in each of the last seven quarters.
Zacks Rank & Price Performance
W.R. Berkley currently has a Zacks Rank #1 (Strong Buy). In the past year, the stock has rallied 35%, against the industry’s decrease of 1.1%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
W.R. Berkley’s trailing 12-month return on equity (ROE) of 17.3% reflects its growth potential. It compares favorably with the industry average of 6.4%and expanded 600 basis points year over year. ROE reflects its efficiency in using its shareholders’ funds.
Business Tailwinds
The Insurance business of W.R. Berkley is well poised to grow given higher premiums at other liability, professional liability, short-tail lines, commercial auto and workers' compensation, rate increase, international business expansion, high retention and increased exposure.
Underwriting income should gain from the compounding rate improvement above loss cost trends along with growth in exposure and lower claims frequency in certain lines of business.
Riding on higher income from fixed maturity securities and increase from equity securities, net investment income is expected to increase in the long run.The rising interest rate environment is a key contributor to growth. W.R. Berkley expects investment income to increase as interest rates continue to move higher.
Riding on strong underwriting income, driven by continued growth in premium volume, improving net investment income and foreign currency gains, operating income is expected to rise.
W.R. Berkleyisone of the largest commercial lines property and casualty insurance providers. It has a solid balance sheet with sufficient liquidity and robust cash flows that support growth initiatives and effective capital deployment.
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. The insurer has returned capital to shareholders in the first half of 2022 through regular and special dividends amounting to $182 million. Its current dividend yield of 0.6% is better than the industry average of 0.4%, 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 Arch Capital Group Ltd. (ACGL - Free Report) , American Financial Group, Inc. (AFG - Free Report) and ProAssurance Corporation (PRA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Arch Capital surpassed earnings estimates in three of the last four quarters and missed in one, the average being 33.64%. In the past year, the insurer has rallied 14.1%.
The Zacks Consensus Estimate for Arch Capital’s 2022 and 2023 earnings has moved 5.7% and 4.9% north, respectively, in the past 30 days.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 37.09%. In the past year, American Financial has gained 1.5%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 2.2% and 3.3% north, respectively, in the past seven days.
The bottom line of ProAssurance surpassed earnings estimates in three of the last four quarters and missed in one, the average being 150.9%. In the past year, the insurer has lost 5.5%.
The Zacks Consensus Estimate for ProAssurance’s 2022 and 2023 earnings has moved 16.9% and 13.9% north, respectively, in the past seven days.