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Here's Why Investors Should Hold Selective Insurance (SIGI)
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Selective Insurance Group, Inc. (SIGI - Free Report) is well poised for growth on the back of solid renewal pricing, increase in exposure, higher income earned on fixed income securities, and prudent capital deployment.
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). Year to date, the stock has rallied 1.2%, outperforming the industry’s increase of 0.3%.
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.
Business Tailwinds
Solid renewal pricing in standard Commercial Lines and excess and surplus lines, solid retention rates in standard commercial and personal lines and an increase in exposure should drive premium growth.
An attractively priced book along with solid profitability as well as industry pricing trends should provide an additional tailwind for renewal pure price increases.
The Excess and Surplus Lines (E&S) segment of Selective Insurance is likely to improve due to renewal pure price increases, higher direct new business and favorable E&S Lines marketplace conditions.
For 2022, Selective Insurance projects an after-tax net investment income of $215 million (prior guidance of $205 million), including after-tax net investment income from its alternative investments of $15 million. Higher income earned on fixed income securities is likely to drive the metric.
Selective Insurance remains focused on lowering the expense ratio through a range of initiatives, including technology and process improvements. In the first half of 2022, the ratio was below the full-year run-rate expectations of 32.5%.
Selective Insurance entered 2022 in the strongest financial position in its 95-year history, with a record level of statutory capital and surplus, and holding company cash and investments. It remains well positioned to continue executing on the strategic objectives and delivering growth and profitability. Its financial position remains solid with $510 million of cash and investments, which is above the longer-term target.
Selective Insurance raised dividends at an eight-year (2015-2022) CAGR of 9.1%. The current dividend yield is 1.3%, which is better than the industry average of 0.4%. SIGI has $90.1 million remaining under its repurchase authorization. Thus, the stock is 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%. Year to date, the insurer has rallied 6.3%.
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%. Year to date, American Financial has lost 1.6%.
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%. Year to date, the insurer has lost 8.6%.
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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Here's Why Investors Should Hold Selective Insurance (SIGI)
Selective Insurance Group, Inc. (SIGI - Free Report) is well poised for growth on the back of solid renewal pricing, increase in exposure, higher income earned on fixed income securities, and prudent capital deployment.
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). Year to date, the stock has rallied 1.2%, outperforming the industry’s increase of 0.3%.
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.
Business Tailwinds
Solid renewal pricing in standard Commercial Lines and excess and surplus lines, solid retention rates in standard commercial and personal lines and an increase in exposure should drive premium growth.
An attractively priced book along with solid profitability as well as industry pricing trends should provide an additional tailwind for renewal pure price increases.
The Excess and Surplus Lines (E&S) segment of Selective Insurance is likely to improve due to renewal pure price increases, higher direct new business and favorable E&S Lines marketplace conditions.
For 2022, Selective Insurance projects an after-tax net investment income of $215 million (prior guidance of $205 million), including after-tax net investment income from its alternative investments of $15 million. Higher income earned on fixed income securities is likely to drive the metric.
Selective Insurance remains focused on lowering the expense ratio through a range of initiatives, including technology and process improvements. In the first half of 2022, the ratio was below the full-year run-rate expectations of 32.5%.
Selective Insurance entered 2022 in the strongest financial position in its 95-year history, with a record level of statutory capital and surplus, and holding company cash and investments. It remains well positioned to continue executing on the strategic objectives and delivering growth and profitability. Its financial position remains solid with $510 million of cash and investments, which is above the longer-term target.
Selective Insurance raised dividends at an eight-year (2015-2022) CAGR of 9.1%. The current dividend yield is 1.3%, which is better than the industry average of 0.4%. SIGI has $90.1 million remaining under its 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 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%. Year to date, the insurer has rallied 6.3%.
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%. Year to date, American Financial has lost 1.6%.
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%. Year to date, the insurer has lost 8.6%.
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.