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Here's Why You Should Retain RLI Stock in Your Portfolio
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RLI Corp. (RLI - Free Report) has been gaining momentum over the past many quarters on the back of diversified and compelling product portfolio, improved retention and new opportunities and effective capital deployment.
Estimate Revision
The Zacks Consensus Estimate for 2022 and 2023 has moved 5.1% and 3.9% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
Earnings Surprise History
RLI has a decent earnings surprise history. Its earnings beat estimates in each of the last four quarters, the average being 43.32%.
Zacks Rank & Price Performance
RLI currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 17.4%, outperforming the industry’s increase of 10%. Solid segmental results and capital position are likely to help the stock continue the upside.
Image Source: Zacks Investment Research
Return on Equity (ROE)
RLI has been effectively improving its return on equity over the years. ROE in the trailing 12 months of 17.7% expanded 490 basis points year over year was better than the industry average of 6.7%. This reflects the insurer’s efficiency in utilizing shareholders’ fund.
Business Tailwinds
The Zacks Consensus Estimate for RLI’s 2022 earnings per share is pegged at $4.50, indicating a year-over-year increase of 16.3%.
RLI’s top-line growth is well poised for growth riding on diversified product portfolio, focus on introducing new products, sturdy business expansion, sustained rate increase, expanded distribution and operational strength.
Product diversification across the Casualty, Property, and Surety segments of RLI has fueled the insurer’s growth and financial success. The Casualty segment continues to gain from rate increases, expanded distribution base in personal umbrella, new production sources and geographic expansion.
The commercial property business has been gaining from higher rates on wind and earthquake exposure. Rate increases, improved retention and new opportunities in the inland marine space should benefit marine products.
The Surety segment continues to benefit from its compelling product portfolio, growth within existing accounts and writing of bonds with new customers.
Underwriting income should gain from benign weather-related losses in the Property segment, a modestly improved underlying loss ratio in the Casualty segment as well as continued favorable benefits from the prior year's loss reserves in all three segments.
RLI boasts solid operating results and its financial position remained strong. Operating cash flows should gain from higher premium receipts.
RLI has been paying dividends for 184 consecutive quarters and increased regular dividends in the last 47 straight years, increasing at a nine-year (2014-2022) CAGR of 4.2%. Its dividend yield of 0.8% is better than the industry average of 0.3%, making the stock an attractive pick for yield-seeking investors. In addition, the insurer has also been paying special dividends since 2011. RLI has $87.5 million of remaining capacity from the repurchase program.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are W.R. Berkley Corporation (WRB - Free Report) , Berkshire Hathaway (BRK.B - Free Report) and American Financial Group, Inc. (AFG - Free Report) . While W.R. Berkley sports a Zacks Rank #1 (Strong Buy), Berkshire Hathaway and American Financial carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of W.R. Berkley surpassed earnings estimates in each of the last four quarters, the average beat being 25.63%. In the past year, the insurer has gained 31.8%.
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings has moved 5.1% and 2.4% north, respectively, in the past 30 days.
Berkshire Hathaway delivered a four-quarter average earnings surprise of 22.18%. In the past year, Berkshire Hathaway has gained 9.6%.
The Zacks Consensus Estimate for BRK.B’s 2022 and 2023 earnings implies a respective increase of 15% and 6.2% from the year-ago reported number.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 28.16%. In the past year, American Financial has lost 2.1%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 0.6% and 1.8% north, respectively, in the past seven days.
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Here's Why You Should Retain RLI Stock in Your Portfolio
RLI Corp. (RLI - Free Report) has been gaining momentum over the past many quarters on the back of diversified and compelling product portfolio, improved retention and new opportunities and effective capital deployment.
Estimate Revision
The Zacks Consensus Estimate for 2022 and 2023 has moved 5.1% and 3.9% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
Earnings Surprise History
RLI has a decent earnings surprise history. Its earnings beat estimates in each of the last four quarters, the average being 43.32%.
Zacks Rank & Price Performance
RLI currently carries a Zacks Rank #3 (Hold). In the past year, the stock has gained 17.4%, outperforming the industry’s increase of 10%. Solid segmental results and capital position are likely to help the stock continue the upside.
Image Source: Zacks Investment Research
Return on Equity (ROE)
RLI has been effectively improving its return on equity over the years. ROE in the trailing 12 months of 17.7% expanded 490 basis points year over year was better than the industry average of 6.7%. This reflects the insurer’s efficiency in utilizing shareholders’ fund.
Business Tailwinds
The Zacks Consensus Estimate for RLI’s 2022 earnings per share is pegged at $4.50, indicating a year-over-year increase of 16.3%.
RLI’s top-line growth is well poised for growth riding on diversified product portfolio, focus on introducing new products, sturdy business expansion, sustained rate increase, expanded distribution and operational strength.
Product diversification across the Casualty, Property, and Surety segments of RLI has fueled the insurer’s growth and financial success. The Casualty segment continues to gain from rate increases, expanded distribution base in personal umbrella, new production sources and geographic expansion.
The commercial property business has been gaining from higher rates on wind and earthquake exposure. Rate increases, improved retention and new opportunities in the inland marine space should benefit marine products.
The Surety segment continues to benefit from its compelling product portfolio, growth within existing accounts and writing of bonds with new customers.
Underwriting income should gain from benign weather-related losses in the Property segment, a modestly improved underlying loss ratio in the Casualty segment as well as continued favorable benefits from the prior year's loss reserves in all three segments.
RLI boasts solid operating results and its financial position remained strong. Operating cash flows should gain from higher premium receipts.
RLI has been paying dividends for 184 consecutive quarters and increased regular dividends in the last 47 straight years, increasing at a nine-year (2014-2022) CAGR of 4.2%. Its dividend yield of 0.8% is better than the industry average of 0.3%, making the stock an attractive pick for yield-seeking investors. In addition, the insurer has also been paying special dividends since 2011. RLI has $87.5 million of remaining capacity from the repurchase program.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are W.R. Berkley Corporation (WRB - Free Report) , Berkshire Hathaway (BRK.B - Free Report) and American Financial Group, Inc. (AFG - Free Report) . While W.R. Berkley sports a Zacks Rank #1 (Strong Buy), Berkshire Hathaway and American Financial carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of W.R. Berkley surpassed earnings estimates in each of the last four quarters, the average beat being 25.63%. In the past year, the insurer has gained 31.8%.
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings has moved 5.1% and 2.4% north, respectively, in the past 30 days.
Berkshire Hathaway delivered a four-quarter average earnings surprise of 22.18%. In the past year, Berkshire Hathaway has gained 9.6%.
The Zacks Consensus Estimate for BRK.B’s 2022 and 2023 earnings implies a respective increase of 15% and 6.2% from the year-ago reported number.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 28.16%. In the past year, American Financial has lost 2.1%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 0.6% and 1.8% north, respectively, in the past seven days.