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Kinsale Capital (KNSL) Up 51.3% in a Year: More Upside Left?
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Shares of Kinsale Capital Group, Inc. (KNSL - Free Report) have gained 51.3% in a year against the industry's decline of 5.9%. The Zacks S&P 500 composite decreased 8.8% in the said time frame. With a market capitalization of $6.1 billion, the average volume of shares traded in the last three months was 0.1 million.
Image Source: Zacks Investment Research
The rally was largely driven by rate increases, higher premium growth rate and growth in the investment portfolio.
This Zacks Rank #2 (Buy) insurer has a solid track record of beating earnings estimates in each of the last seven quarters.
KNSL has a favorable VGM Score of B. VGM Score helps to identify stocks with the most attractive value, the best growth and the most promising momentum.
Can KNSL Stock Retain the Momentum?
The Zacks Consensus Estimate for 2022 and 2023 earnings per share is pegged at $7.23 and $8.42, indicating year-over-year increases of 25.9% and 16.5%, respectively.
Kinsale Capital has an impressive Growth Score of A. This style score helps analyze the growth prospects of a company. Back-tested results have shown that stocks with a favorable Growth Score when combined with a solid Zacks Rank offer better returns.
The insurer’s ROE for the trailing 12 months is 24%, which expanded 840 basis points year over year and was better than the industry average of 6.4%, reflecting efficiency in utilizing shareholders’ fund.
Kinsale Capital’s premium income is expected to improve in the near term on the back of increasing submissions and rate increases.
Kinsale remains well poised to gain from its growing E&S market, which enables the insurer to continue rate increases and grow premiums at a high level.
Kinsale Capital expects the E&S market to grow at a double-digit premium growth rate at the beginning of 2022.
Net investment income is expected to improve in the near term on the back of growth in the investment portfolio generated from the investment of positive operating funds since Dec 31, 2020. With the Fed hiking interest rate four times already year to date and more hikes expected in the near term, investment of KNSL’s excess operating funds is likely to create a robust investment portfolio.
The expense ratio continues to benefit from economies of scale from premium expansion and management's continued focus on controlling costs. Kinsale Capital believes an expense ratio in the low-to-mid 20s to be rational. The technological platform is likely to add to the scalability of the business as well. Its unique business strategy and expert underwriting and claim handling, coupled with a technology-driven low-cost operation, poise it well to deliver profit and growth in the future.
Kinsale Capital’s underwriting income should gain from strong premium growth and lower relative expenses. The insurer boasts the best combination of high growth and low combined ratio among peers.
Banking on solid cash flow, the company has increased its dividend since 2017 at a five-year CAGR (2016-2022) of 14.6%.
The Zacks Consensus Estimate for 2022 and 2023 has moved 4.8% and 3% north, respectively, in the past 30 days, reflecting analysts’ optimism.
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 12.8%.
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 lost 2.8%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 3.1% and 3.3% north, respectively, in the past 30 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 11.7%.
The Zacks Consensus Estimate for ProAssurance’s 2022 and 2023 earnings has moved 25.9% and 13.9% north, respectively, in the past 30 days.
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Kinsale Capital (KNSL) Up 51.3% in a Year: More Upside Left?
Shares of Kinsale Capital Group, Inc. (KNSL - Free Report) have gained 51.3% in a year against the industry's decline of 5.9%. The Zacks S&P 500 composite decreased 8.8% in the said time frame. With a market capitalization of $6.1 billion, the average volume of shares traded in the last three months was 0.1 million.
Image Source: Zacks Investment Research
The rally was largely driven by rate increases, higher premium growth rate and growth in the investment portfolio.
This Zacks Rank #2 (Buy) insurer has a solid track record of beating earnings estimates in each of the last seven quarters.
KNSL has a favorable VGM Score of B. VGM Score helps to identify stocks with the most attractive value, the best growth and the most promising momentum.
Can KNSL Stock Retain the Momentum?
The Zacks Consensus Estimate for 2022 and 2023 earnings per share is pegged at $7.23 and $8.42, indicating year-over-year increases of 25.9% and 16.5%, respectively.
Kinsale Capital has an impressive Growth Score of A. This style score helps analyze the growth prospects of a company. Back-tested results have shown that stocks with a favorable Growth Score when combined with a solid Zacks Rank offer better returns.
The insurer’s ROE for the trailing 12 months is 24%, which expanded 840 basis points year over year and was better than the industry average of 6.4%, reflecting efficiency in utilizing shareholders’ fund.
Kinsale Capital’s premium income is expected to improve in the near term on the back of increasing submissions and rate increases.
Kinsale remains well poised to gain from its growing E&S market, which enables the insurer to continue rate increases and grow premiums at a high level.
Kinsale Capital expects the E&S market to grow at a double-digit premium growth rate at the beginning of 2022.
Net investment income is expected to improve in the near term on the back of growth in the investment portfolio generated from the investment of positive operating funds since Dec 31, 2020. With the Fed hiking interest rate four times already year to date and more hikes expected in the near term, investment of KNSL’s excess operating funds is likely to create a robust investment portfolio.
The expense ratio continues to benefit from economies of scale from premium expansion and management's continued focus on controlling costs. Kinsale Capital believes an expense ratio in the low-to-mid 20s to be rational. The technological platform is likely to add to the scalability of the business as well.
Its unique business strategy and expert underwriting and claim handling, coupled with a technology-driven low-cost operation, poise it well to deliver profit and growth in the future.
Kinsale Capital’s underwriting income should gain from strong premium growth and lower relative expenses. The insurer boasts the best combination of high growth and low combined ratio among peers.
Banking on solid cash flow, the company has increased its dividend since 2017 at a five-year CAGR (2016-2022) of 14.6%.
The Zacks Consensus Estimate for 2022 and 2023 has moved 4.8% and 3% north, respectively, in the past 30 days, reflecting analysts’ optimism.
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 12.8%.
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 lost 2.8%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 3.1% and 3.3% north, respectively, in the past 30 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 11.7%.
The Zacks Consensus Estimate for ProAssurance’s 2022 and 2023 earnings has moved 25.9% and 13.9% north, respectively, in the past 30 days.