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Why Should You Stay Invested in Arch Capital (ACGL) Stock?
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Arch Capital Group Ltd.’s (ACGL - Free Report) new business opportunities, rate increases, growth in existing accounts and solid capital position make it worth retaining in one’s portfolio.
ACGL has a decent earnings surprise history, having surpassed estimates in three of the last reported quarter while missing it in one, the average being 15.37%.
Return on equity in the trailing 12 months was 13.2%, better than the industry average of 6.7%. This highlights the company’s efficiency in utilizing shareholders’ fund.
Zacks Rank & Price Performance
Arch Capital currently carries a Zacks Rank #3 (Hold). Year to date, the stock has gained 35.7%, compared with the industry’s increase of 4.4%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for 2023 earnings stands at $5.58, suggesting an increase of 38.5% on 18.2% higher revenues of $11.7 billion. The expected long-term earnings growth rate is pegged at 10%, better than the industry average of 9.7%.
Growth Drivers
Arch Capital is a leading Specialty P&C and Mortgage Insurance business that operates across a wide range of geographies and offers products that provide meaningful diversification and earnings stability.
ACGL’s new business opportunities, rate increases, growth in existing accounts and growth in Australian single-premium mortgage insurance should help it continue to generate improved premiums.
The company eyes strategic buyouts that help it expand internationally, add capabilities, enhance operations and diversify its business at attractive risk-adjusted returns. This insurer thus stays focused on diversifying its Mortgage Insurance business via strategic acquisitions that also complement the strength in the specialty insurance and reinsurance businesses.
Arch Capital’s solid balance sheet with high liquidity and low leverage shields it from market volatility. This, in turn, helps ACGL retain its financial strength and flexibility required to pursue new opportunities in keeping with its long-term strategy.
The insurer’s solid capital position supports effective capital deployment that in turn enhances shareholders’ value. ACGL has $596.4 million remaining under its buyback authorization.
American Financial’s earnings surpassed estimates in all the last four quarters, the average beat being 28.16%. In the past year, American Financial has lost 0.8%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings indicates a respective year-over-year increase of 0.2% and 2.9%.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 90.5%.
The Zacks Consensus Estimate for ROOT’s 2022 and 2023 earnings indicates a respective year-over-year increase of 44.8% and 23.8%.
Kinsale Capital’s earnings surpassed estimates in all the last four quarters, the average being 15.16%. In the past year, Kinsale Capital has gained 32.9%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings implies a respective year-over-year rise of 27.5% and 21.9%.
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Why Should You Stay Invested in Arch Capital (ACGL) Stock?
Arch Capital Group Ltd.’s (ACGL - Free Report) new business opportunities, rate increases, growth in existing accounts and solid capital position make it worth retaining in one’s portfolio.
ACGL has a decent earnings surprise history, having surpassed estimates in three of the last reported quarter while missing it in one, the average being 15.37%.
This insurer has an impressive VGM Score of B.
Return on Equity
Return on equity in the trailing 12 months was 13.2%, better than the industry average of 6.7%. This highlights the company’s efficiency in utilizing shareholders’ fund.
Zacks Rank & Price Performance
Arch Capital currently carries a Zacks Rank #3 (Hold). Year to date, the stock has gained 35.7%, compared with the industry’s increase of 4.4%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for 2023 earnings stands at $5.58, suggesting an increase of 38.5% on 18.2% higher revenues of $11.7 billion. The expected long-term earnings growth rate is pegged at 10%, better than the industry average of 9.7%.
Growth Drivers
Arch Capital is a leading Specialty P&C and Mortgage Insurance business that operates across a wide range of geographies and offers products that provide meaningful diversification and earnings stability.
ACGL’s new business opportunities, rate increases, growth in existing accounts and growth in Australian single-premium mortgage insurance should help it continue to generate improved premiums.
The company eyes strategic buyouts that help it expand internationally, add capabilities, enhance operations and diversify its business at attractive risk-adjusted returns. This insurer thus stays focused on diversifying its Mortgage Insurance business via strategic acquisitions that also complement the strength in the specialty insurance and reinsurance businesses.
Arch Capital’s solid balance sheet with high liquidity and low leverage shields it from market volatility. This, in turn, helps ACGL retain its financial strength and flexibility required to pursue new opportunities in keeping with its long-term strategy.
The insurer’s solid capital position supports effective capital deployment that in turn enhances shareholders’ value. ACGL has $596.4 million remaining under its buyback authorization.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are American Financial Group, Inc. (AFG - Free Report) , Root, Inc. (ROOT - Free Report) and Kinsale Capital Group, Inc. (KNSL - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
American Financial’s earnings surpassed estimates in all the last four quarters, the average beat being 28.16%. In the past year, American Financial has lost 0.8%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings indicates a respective year-over-year increase of 0.2% and 2.9%.
Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 90.5%.
The Zacks Consensus Estimate for ROOT’s 2022 and 2023 earnings indicates a respective year-over-year increase of 44.8% and 23.8%.
Kinsale Capital’s earnings surpassed estimates in all the last four quarters, the average being 15.16%. In the past year, Kinsale Capital has gained 32.9%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings implies a respective year-over-year rise of 27.5% and 21.9%.