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Here's Why W.R. Berkley (WRB) Stock is an Attractive Bet Now
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W.R. Berkley Corporation (WRB - Free Report) has been in investors' good books on the back of rate increases, high retention, growth in premium rates and exposure as well as effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for W.R. Berkley’s 2023 earnings is $4.94, indicating a 12.7% increase from the year-ago reported figure on 6.9% higher revenues of $11.73 billion.
The consensus estimate for 2024 earnings is $5.56, indicating a 12.6% increase from the year-ago reported figure on 8.9% higher revenues of $12.78 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for W.R. Berkley’s 2023 earnings has moved 4.2% north in the past 60 days. This should instill investors' confidence in the stock.
Earnings Surprise History
WRB has a decent earnings surprise history. It beat estimates in each of the last four quarters with the average being 21.12%.
Zacks Rank & Price Performance
W.R. Berkley currently has a Zacks Rank #2 (Buy). In the past year, the stock has lost 4.9% compared with the industry’s decrease of 7.4%.
Image Source: Zacks Investment Research
Style Score
W.R. Berkley has a favorable VGM Score of A. VGM Score helps to identify stocks with the most attractive value, the 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 (Strong Buy) or 2, offer the best opportunities in the value investing space.
Business Tailwinds
The Insurance business of W.R. Berkley is well-poised to grow, given higher premiums from other liability, short-tail lines, workers' compensation, commercial automobile and professional liability.
Higher premiums at casualty reinsurance, property reinsurance and monoline excess are likely to drive the performance of the Reinsurance & Monoline Excess segment.
Underwriting income should gain from the compounding rate improvement above loss cost trends along with growth in exposure and lower claims frequency in certain lines of business.
With the Fed raising the interest rate eight times since March 2022 and more increases in the cards, net investment income of the company is expected to rise. This is because the insurer invests in alternative assets. Net investment income should grow as investment funds continued to outperform and fixed-maturity income benefited from higher yields.
W.R. Berkley has an impressive Value Score of A, reflecting an attractive valuation of the stock.
W.R. Berkley is one of the largest commercial lines property and casualty insurance providers. It has a solid balance sheet with sufficient liquidity and robust cash flows that support growth initiatives and effective capital deployment.
A strong capital position helps W.R. Berkley deploy capital via share repurchases, special dividends and dividend hikes that enhance shareholders value. WRB has raised dividends 17 times since 2005 and paid 14 special dividends since 2012. Its current dividend yield of 0.6% is better than the industry average of 0.3%, which makes WRB stock an attractive pick for yield-seeking investors.
The insurer also has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
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 2023 has moved 5.4% north in the past 60 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 1.5%.
The Zacks Consensus Estimate for Everest Re’s 2023 and 2024 earnings per share is pegged at $46.03 and $53.25, indicating year-over-year increase of 69.9% and 15.7%, respectively. In the past year, RE has gained 24.3%.
RE beat estimates in each of the last four quarters, the average being 18.41%.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 13.83%. In the past year, KNSL has gained 32.7%.
The Zacks Consensus Estimate for Kinsale Capital’s 2023 and 2024 earnings per share is pegged at $9.86 and $11.85, indicating year-over-year increase of 26.4% and 20.2%, respectively.
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Here's Why W.R. Berkley (WRB) Stock is an Attractive Bet Now
W.R. Berkley Corporation (WRB - Free Report) has been in investors' good books on the back of rate increases, high retention, growth in premium rates and exposure as well as effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for W.R. Berkley’s 2023 earnings is $4.94, indicating a 12.7% increase from the year-ago reported figure on 6.9% higher revenues of $11.73 billion.
The consensus estimate for 2024 earnings is $5.56, indicating a 12.6% increase from the year-ago reported figure on 8.9% higher revenues of $12.78 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for W.R. Berkley’s 2023 earnings has moved 4.2% north in the past 60 days. This should instill investors' confidence in the stock.
Earnings Surprise History
WRB has a decent earnings surprise history. It beat estimates in each of the last four quarters with the average being 21.12%.
Zacks Rank & Price Performance
W.R. Berkley currently has a Zacks Rank #2 (Buy). In the past year, the stock has lost 4.9% compared with the industry’s decrease of 7.4%.
Image Source: Zacks Investment Research
Style Score
W.R. Berkley has a favorable VGM Score of A. VGM Score helps to identify stocks with the most attractive value, the 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 (Strong Buy) or 2, offer the best opportunities in the value investing space.
Business Tailwinds
The Insurance business of W.R. Berkley is well-poised to grow, given higher premiums from other liability, short-tail lines, workers' compensation, commercial automobile and professional liability.
Higher premiums at casualty reinsurance, property reinsurance and monoline excess are likely to drive the performance of the Reinsurance & Monoline Excess segment.
Underwriting income should gain from the compounding rate improvement above loss cost trends along with growth in exposure and lower claims frequency in certain lines of business.
With the Fed raising the interest rate eight times since March 2022 and more increases in the cards, net investment income of the company is expected to rise. This is because the insurer invests in alternative assets. Net investment income should grow as investment funds continued to outperform and fixed-maturity income benefited from higher yields.
W.R. Berkley has an impressive Value Score of A, reflecting an attractive valuation of the stock.
W.R. Berkley is one of the largest commercial lines property and casualty insurance providers. It has a solid balance sheet with sufficient liquidity and robust cash flows that support growth initiatives and effective capital deployment.
A strong capital position helps W.R. Berkley deploy capital via share repurchases, special dividends and dividend hikes that enhance shareholders value. WRB has raised dividends 17 times since 2005 and paid 14 special dividends since 2012. Its current dividend yield of 0.6% is better than the industry average of 0.3%, which makes WRB stock an attractive pick for yield-seeking investors.
The insurer also has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
Other Stocks to Consider
Some top-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited (AXS - Free Report) , Everest Re Group, Ltd. and Kinsale Capital Group, Inc. (KNSL - Free Report) , each sporting a Zacks Rank #1. 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 2023 has moved 5.4% north in the past 60 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 1.5%.
The Zacks Consensus Estimate for Everest Re’s 2023 and 2024 earnings per share is pegged at $46.03 and $53.25, indicating year-over-year increase of 69.9% and 15.7%, respectively. In the past year, RE has gained 24.3%.
RE beat estimates in each of the last four quarters, the average being 18.41%.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 13.83%. In the past year, KNSL has gained 32.7%.
The Zacks Consensus Estimate for Kinsale Capital’s 2023 and 2024 earnings per share is pegged at $9.86 and $11.85, indicating year-over-year increase of 26.4% and 20.2%, respectively.