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Reasons Why Selective Insurance (SIGI) is an Attractive Pick
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Selective Insurance Group, Inc. (SIGI - Free Report) has been benefiting from solid renewal pricing, increase in exposure, higher income earned on fixed-income securities and prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for Selective Insurance’s 2023 and 2024 earnings per share is pegged at $6.57 and $7.55, indicating year-over-year increases of 30.6% and 14.9%, respectively.
Northbound Estimate Revision
The Zacks Consensus Estimate for Selective Insurance’s 2023 and 2024 earnings has moved 8.9% and 9.7% north in the past 30 days. This should instill investors' confidence in the stock.
Zacks Rank & Price Performance
Selective Insurance currently flaunts a Zacks Rank #1 (Strong Buy). In the past year, the stock has rallied 29.5%, outperforming the industry’s growth of 0.5%.
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.
Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best opportunities in the value investing space.
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 because of renewal pure price increases, higher direct new business and favorable E&S Lines marketplace conditions.
For 2023, Selective Insurance projects an after-tax net investment income of $300 million (prior guidance $215 million) that includes after-tax net investment income from the alternative investments of $30 million (prior guidance $7 million). Higher returns on the alternative investments in other investments portfolio and higher income earned on fixed-income securities are likely to drive the metric.
Selective Insurance’s capital position remains strong with $2.5 billion of GAAP equity and statutory capital and surplus as of Dec 31, 2022. The holding company's cash and liquidity position remained strong with $484 million of cash and investments, which is well in excess of the longer-term target. It exited the fourth quarter with total assets of $10.8 billion, which increased 3% from 2021 end. It remains well-positioned to continue executing on the strategic objectives, and delivering growth and profitability.
Selective Insurance raised dividends, seeing a nine-year CAGR (2015-2023) of 8.8%. In 2022, it bought back shares worth $12.4 million and had $84.2 million of shares remaining under its authorization as of Dec 31, 2022. Riding on strong financial and operating performance, the board approved a 7% hike in the quarterly cash dividend in November 2022. Such steadfast endeavors buoy confidence among investors, making it an attractive pick for yield-seeking investors.
SIGI also has an impressive Value Score of B, reflecting an attractive valuation of the stock.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited (AXS - Free Report) , Everest Re Group, Ltd. and CNA Financial Corporation (CNA - Free Report) . While Axis Capital and Everest Re sport a Zacks Rank #1, CNA Financial carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital beat estimates in three of the last four quarters and missed in one, the average being 5.70%. The Zacks Consensus Estimate for both 2023 and 2024 has moved 0.1% north in the past seven days.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $7.53 and $8.42, indicating year-over-year increase of 29.6% and 11.7%, respectively. In the past year, AXS has gained 9%.
The Zacks Consensus Estimate for Everest Re’s 2023 and 2024 earnings per share is pegged at $44.68 and $51.29, indicating year-over-year increases of 64.9% and 14.7%, respectively. In the past year, RE has gained 25.3%.
RE beat estimates in each of the last four quarters, the average being 18.41%.
The Zacks Consensus Estimate for CNA Financials’ 2023 and 2024 earnings per share is pegged at $4.25 and $4.41, indicating year-over-year increases of 10.6% and 3.8%, respectively. In the past year, CNA has lost 9%.
The Zacks Consensus Estimate for CNA’s 2023 and 2024 earnings has moved 4.2% and 14.8% north in the past 30 days.
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Reasons Why Selective Insurance (SIGI) is an Attractive Pick
Selective Insurance Group, Inc. (SIGI - Free Report) has been benefiting from solid renewal pricing, increase in exposure, higher income earned on fixed-income securities and prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for Selective Insurance’s 2023 and 2024 earnings per share is pegged at $6.57 and $7.55, indicating year-over-year increases of 30.6% and 14.9%, respectively.
Northbound Estimate Revision
The Zacks Consensus Estimate for Selective Insurance’s 2023 and 2024 earnings has moved 8.9% and 9.7% north in the past 30 days. This should instill investors' confidence in the stock.
Zacks Rank & Price Performance
Selective Insurance currently flaunts a Zacks Rank #1 (Strong Buy). In the past year, the stock has rallied 29.5%, outperforming the industry’s growth of 0.5%.
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.
Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best opportunities in the value investing space.
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 because of renewal pure price increases, higher direct new business and favorable E&S Lines marketplace conditions.
For 2023, Selective Insurance projects an after-tax net investment income of $300 million (prior guidance $215 million) that includes after-tax net investment income from the alternative investments of $30 million (prior guidance $7 million). Higher returns on the alternative investments in other investments portfolio and higher income earned on fixed-income securities are likely to drive the metric.
Selective Insurance’s capital position remains strong with $2.5 billion of GAAP equity and statutory capital and surplus as of Dec 31, 2022. The holding company's cash and liquidity position remained strong with $484 million of cash and investments, which is well in excess of the longer-term target. It exited the fourth quarter with total assets of $10.8 billion, which increased 3% from 2021 end. It remains well-positioned to continue executing on the strategic objectives, and delivering growth and profitability.
Selective Insurance raised dividends, seeing a nine-year CAGR (2015-2023) of 8.8%. In 2022, it bought back shares worth $12.4 million and had $84.2 million of shares remaining under its authorization as of Dec 31, 2022. Riding on strong financial and operating performance, the board approved a 7% hike in the quarterly cash dividend in November 2022. Such steadfast endeavors buoy confidence among investors, making it an attractive pick for yield-seeking investors.
SIGI also has an impressive Value Score of B, reflecting an attractive valuation of the stock.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited (AXS - Free Report) , Everest Re Group, Ltd. and CNA Financial Corporation (CNA - Free Report) . While Axis Capital and Everest Re sport a Zacks Rank #1, CNA Financial carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital beat estimates in three of the last four quarters and missed in one, the average being 5.70%. The Zacks Consensus Estimate for both 2023 and 2024 has moved 0.1% north in the past seven days.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $7.53 and $8.42, indicating year-over-year increase of 29.6% and 11.7%, respectively. In the past year, AXS has gained 9%.
The Zacks Consensus Estimate for Everest Re’s 2023 and 2024 earnings per share is pegged at $44.68 and $51.29, indicating year-over-year increases of 64.9% and 14.7%, respectively. In the past year, RE has gained 25.3%.
RE beat estimates in each of the last four quarters, the average being 18.41%.
The Zacks Consensus Estimate for CNA Financials’ 2023 and 2024 earnings per share is pegged at $4.25 and $4.41, indicating year-over-year increases of 10.6% and 3.8%, respectively. In the past year, CNA has lost 9%.
The Zacks Consensus Estimate for CNA’s 2023 and 2024 earnings has moved 4.2% and 14.8% north in the past 30 days.