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Should You Retain Markel (MKL) Stock in Your Portfolio?

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Markel Corporation (MKL - Free Report) has been gaining momentum given strong policy retention levels, expanded product offerings, lower operating expenses and a solid cash position.

Growth Projections

The Zacks Consensus Estimate for Markel’s 2022 and 2023 earnings per share is pegged at $65.87 and $85.48, indicating a year-over-year increase of 11.4% and 29.8%, respectively.

Zacks Rank & Price Performance

Markel currently carries a Zacks Rank #3 (Hold). The stock has rallied 6.7%, outperforming the industry’s increase of 6.2% in the past year.

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Return on Equity (ROE)

Markel’s trailing 12-month return on equity was 6.4%, up 10 basis points year over year. ROE reflects its efficiency in using its shareholders’ funds.

Style Score

Markel has a VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.

Business Tailwinds

Riding on solid growth in new business, ongoing favorable pricing trends across most of the product lines, especially within the professional liability and general liability product lines in both the Insurance and Reinsurance segments, premiums in the professional liability and general liability product lines are likely to improve in the long run.

Higher new business volume, favorable rates and higher retention of renewals are likely to boost the performance of the Insurance segment. Continued expansion of the classic cars business should boost the personal lines product business.

The favorable impact of higher earned premiums as well as lower compensation and general expenses across both the Insurance and Reinsurance segments is likely to improve the expense ratio of Markel.

The combined ratio of Markel should continue to benefit from a lower attritional loss ratio, a favorable pricing environment and the impact of underwriting actions taken to enhance profitability.

The property and casualty insurer remains focused on strategic acquisitions to enhance its reinsurance product offerings. The buyouts have helped MKL to enhance its surety capabilities and ramp up Markel Ventures’ revenues and expand its reinsurance product offerings.

Markel seeks to maintain prudent levels of liquidity and financial leverage for the protection of policyholders, creditors and shareholders. Higher net premium volumes across both the underwriting segments should boost operating cash flow.

Riding on a solid capital position, Markel has engaged in share buybacks. At present, $585.6 million remained available for repurchases under the program.

Stocks to Consider

Some better-ranked stocks from the property and casualty insurance industry are Kinsale Capital Group, Inc. (KNSL - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and Root, Inc. (ROOT - Free Report) . While Kinsale Capital sports a Zacks Rank #1 (Strong Buy), W.R. Berkley and Root carry Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

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 23.2%.

The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings implies a respective year-over-year rise of 27.5% and 22.4%.

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 36.5%.

The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings implies a respective year-over-year rise of 26.2% and 11.5%.

Root delivered a trailing four-quarter average earnings surprise of 22.44%. In the past year, ROOT has lost 92.3%.

The Zacks Consensus Estimate for ROOT’s 2022 and 2023 earnings indicates a respective year-over-year increase of 44.7% and 23.9%.

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