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Here's Why Kinsale Capital (KNSL) Stock is an Attractive Bet Now
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Kinsale Capital Group, Inc. (KNSL - Free Report) is well-poised for growth on the back of solid Excess & Surplus (“E&S”) market, strong premium growth, low expense ratio and prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for Kinsale Capital’s 2023 earnings is pegged at $10.62, indicating a 36.1% increase from the year-ago reported figure on 39.8% higher revenues of $1.15 billion. The consensus estimate for 2024 earnings is pegged at $12.92, indicating a 21.6% increase from the year-ago reported figure on 21.9% higher revenues of $1.40 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 has moved 2.4% and 4.1% north, respectively, in the past 30 days, reflecting analysts’ optimism.
Earnings Surprise History
KNSL has a solid earnings surprise history. It beat estimates in each of the last four quarters, the average being 14.77%.
Zacks Rank & Price Performance
Shares of this Zacks Rank #1 (Strong Buy) property and casualty insurer have gained 65.2% in a year, outperforming the industry’s growth of 17.9%. We expect the company’s policy to ramp up its growth profile and capital position and drive shares higher.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Kinsale Capital’s operating ROE of 28.3% expanded 650 basis points year over year in the first quarter of 2023. For the long term, KNSL even targets to maintain operating ROE in the mid-teens range.
Business Tailwinds
KNSL’s premium income is expected to improve in the near term on the back of higher submission activity from brokers and increased rates across most lines of business, resulting from continued favorable conditions in the E&S market.
The combination of highly controlled underwriting merged with advanced technology-driven low costs and a focus on the E&S Lines Insurance market is driving the profitability and growth of Kinsale Capital.
The E&S Lines Insurance segment continues to witness rapid growth owing to dislocation in the overall property and casualty market.
A combination of premium growth and favorable rate increases from a strong underwriting environment and lower levels of operating expenses relative to premium growth and management's cost control efforts are expected to drive the underwriting income of the insurer.
The expense ratio is expected to gain from lower net commissions incurred and reduced other underwriting expenses as a percentage of earned premiums, economies of scale from premium expansion and management's continued focus on controlling costs.
Strong cash flows enable the property and casualty insurer to engage in shareholder-friendly moves like dividend hikes. Banking on solid cash flow, KNSL has increased dividend since 2017 at an eight-year CAGR (2016-2023) of 13.7%.
Kinsale Capital has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
RLI beat estimates in each of the last four quarters, the average being 43.50%. In the past year, the insurer has gained 18.1%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 3.6% and 10.9% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
NMI Holdings beat estimates in each of the last four quarters, the average being 5.95%. In the past year, NMIH has gained 51.3%.
The Zacks Consensus Estimate for NMI Holdings’ 2023 and 2024 earnings per share is pegged at $3.58 and $3.93, indicating a year-over-year increase of 5.6% and 9.5%, respectively.
Root beat estimates in each of the last four quarters, the average being 18.24%. In the past year, the insurer has lost 43.4%.
The Zacks Consensus Estimate for ROOT’s 2023 and 2024 earnings per share indicates a year-over-year increase of 43.8% and 42.5%, respectively.
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Here's Why Kinsale Capital (KNSL) Stock is an Attractive Bet Now
Kinsale Capital Group, Inc. (KNSL - Free Report) is well-poised for growth on the back of solid Excess & Surplus (“E&S”) market, strong premium growth, low expense ratio and prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for Kinsale Capital’s 2023 earnings is pegged at $10.62, indicating a 36.1% increase from the year-ago reported figure on 39.8% higher revenues of $1.15 billion. The consensus estimate for 2024 earnings is pegged at $12.92, indicating a 21.6% increase from the year-ago reported figure on 21.9% higher revenues of $1.40 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 has moved 2.4% and 4.1% north, respectively, in the past 30 days, reflecting analysts’ optimism.
Earnings Surprise History
KNSL has a solid earnings surprise history. It beat estimates in each of the last four quarters, the average being 14.77%.
Zacks Rank & Price Performance
Shares of this Zacks Rank #1 (Strong Buy) property and casualty insurer have gained 65.2% in a year, outperforming the industry’s growth of 17.9%. We expect the company’s policy to ramp up its growth profile and capital position and drive shares higher.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Kinsale Capital’s operating ROE of 28.3% expanded 650 basis points year over year in the first quarter of 2023. For the long term, KNSL even targets to maintain operating ROE in the mid-teens range.
Business Tailwinds
KNSL’s premium income is expected to improve in the near term on the back of higher submission activity from brokers and increased rates across most lines of business, resulting from continued favorable conditions in the E&S market.
The combination of highly controlled underwriting merged with advanced technology-driven low costs and a focus on the E&S Lines Insurance market is driving the profitability and growth of Kinsale Capital.
The E&S Lines Insurance segment continues to witness rapid growth owing to dislocation in the overall property and casualty market.
A combination of premium growth and favorable rate increases from a strong underwriting environment and lower levels of operating expenses relative to premium growth and management's cost control efforts are expected to drive the underwriting income of the insurer.
The expense ratio is expected to gain from lower net commissions incurred and reduced other underwriting expenses as a percentage of earned premiums, economies of scale from premium expansion and management's continued focus on controlling costs.
Strong cash flows enable the property and casualty insurer to engage in shareholder-friendly moves like dividend hikes. Banking on solid cash flow, KNSL has increased dividend since 2017 at an eight-year CAGR (2016-2023) of 13.7%.
Kinsale Capital has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are RLI Corp. (RLI - Free Report) , NMI Holdings Inc (NMIH - Free Report) and Root, Inc. (ROOT - Free Report) . While RLI Corp. sports a Zacks Rank #1, NMI Holdings and Root carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
RLI beat estimates in each of the last four quarters, the average being 43.50%. In the past year, the insurer has gained 18.1%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 3.6% and 10.9% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
NMI Holdings beat estimates in each of the last four quarters, the average being 5.95%. In the past year, NMIH has gained 51.3%.
The Zacks Consensus Estimate for NMI Holdings’ 2023 and 2024 earnings per share is pegged at $3.58 and $3.93, indicating a year-over-year increase of 5.6% and 9.5%, respectively.
Root beat estimates in each of the last four quarters, the average being 18.24%. In the past year, the insurer has lost 43.4%.
The Zacks Consensus Estimate for ROOT’s 2023 and 2024 earnings per share indicates a year-over-year increase of 43.8% and 42.5%, respectively.