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Should You Retain Assurant (AIZ) Stock in Your Portfolio?
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Assurant, Inc. (AIZ - Free Report) is well-poised for growth, driven by increasing Global Automotive business, higher average insured values, improved invested assets, favorable growth estimates and effective capital deployment.
Earnings Estimate
The Zacks Consensus Estimate for Assurant’s 2023 earnings is pegged at $12.08 per share, indicating an 8.5% increase from the year-ago reported figure on 3.6% higher revenues of $10.75 billion. The consensus estimate for 2024 earnings is pegged at $14.25 per share, indicating an 18% increase from the year-ago reported figure on 3.6% higher revenues of $11.14 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 has moved 8.7% and 2.8% north, respectively, in the past 30 days, reflecting analysts’ optimism.
Earnings Surprise History
Assurant has a decent surprise history, beating earnings estimates in each of the last four quarters, the average earnings surprise being 24.39%.
Zacks Rank
The company currently carries a Zacks Rank #3 (Hold). Year to date, shares of AIZ have gained 12.7% against the industry’s decline of 7.6%.
Image Source: Zacks Investment Research
Return on Equity
Assurant’s return on equity is 12.5%, which is better than the industry average of 9.8%. The same improved 131 basis points year over year.
Style Score
Assurant 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
Continued organic growth across distribution channels, extended service contracts and mobile subscribers should fuel growth of net earned premiums of Assurant in the long run.
Revenues from the Global Lifestyle segment increased 4% in the first half of 2023. AIZ’s Global Automotive, reflecting prior-period sales of vehicle service contracts as well as higher net earned premiums fees and other income in Connected Living will continue to drive growth in this segment.
The International business is also expected to stabilize as the multi-line insurer is taking steps to grow its footprint through expansion and expense handling. The Global Automotive business is expected to show steady progress as AIZ materializes benefits from its partnership with CNH Industrial. Increasing the number of partnerships outside the United States will further boost its results.
The Global Housing segment will benefit from an increase in lender-placed policies in-force as well as higher average insured values and premium rates. In this segment, the business is expected to grow mid to high-single-digits in 2023 and 2024. The top-line growth is likely to be driven by higher net earned premiums, fees and other income and net investment income.
Net investment income is expected to gain from higher yields on fixed maturity securities, cash and cash equivalents, and higher income from commercial mortgage loans on real estate due to improved invested assets.
Assurant has a strong capital management policy. Its solid capital position supports effective capital deployment. At present, $245 million remains unused under the repurchase authorization. The insurer expects to deploy capital primarily to support business growth by funding investments, mergers and acquisitions and returning capital to shareholders in the form of share repurchases and dividends.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Arch Capital Group Ltd. (ACGL - Free Report) , Axis Capital Holdings Limited (AXS - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) . While Arch Capital and Axis Capital sport a Zacks Rank #1 (Strong Buy) each, Cincinnati Financial carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 26.83%. In the past year, ACGL has gained 62.7%.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings per share is pegged at $6.58 and $7.25, indicating a year-over-year increase of 35.1% and 10.2%, respectively.
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 9.75%. In the past year, AXS has gained 0.8%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.18 and $9.17, indicating a year-over-year increase of 40.7% and 12.1%, respectively.
Cincinnati Financial has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 25.25%. In the past year, CINF has lost 0.8%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 earnings per share is pegged at $5 and $5.88, indicating a year-over-year increase of 17.9% and 17.6%, respectively.
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Should You Retain Assurant (AIZ) Stock in Your Portfolio?
Assurant, Inc. (AIZ - Free Report) is well-poised for growth, driven by increasing Global Automotive business, higher average insured values, improved invested assets, favorable growth estimates and effective capital deployment.
Earnings Estimate
The Zacks Consensus Estimate for Assurant’s 2023 earnings is pegged at $12.08 per share, indicating an 8.5% increase from the year-ago reported figure on 3.6% higher revenues of $10.75 billion. The consensus estimate for 2024 earnings is pegged at $14.25 per share, indicating an 18% increase from the year-ago reported figure on 3.6% higher revenues of $11.14 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 has moved 8.7% and 2.8% north, respectively, in the past 30 days, reflecting analysts’ optimism.
Earnings Surprise History
Assurant has a decent surprise history, beating earnings estimates in each of the last four quarters, the average earnings surprise being 24.39%.
Zacks Rank
The company currently carries a Zacks Rank #3 (Hold). Year to date, shares of AIZ have gained 12.7% against the industry’s decline of 7.6%.
Image Source: Zacks Investment Research
Return on Equity
Assurant’s return on equity is 12.5%, which is better than the industry average of 9.8%. The same improved 131 basis points year over year.
Style Score
Assurant 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
Continued organic growth across distribution channels, extended service contracts and mobile subscribers should fuel growth of net earned premiums of Assurant in the long run.
Revenues from the Global Lifestyle segment increased 4% in the first half of 2023. AIZ’s Global Automotive, reflecting prior-period sales of vehicle service contracts as well as higher net earned premiums fees and other income in Connected Living will continue to drive growth in this segment.
The International business is also expected to stabilize as the multi-line insurer is taking steps to grow its footprint through expansion and expense handling. The Global Automotive business is expected to show steady progress as AIZ materializes benefits from its partnership with CNH Industrial. Increasing the number of partnerships outside the United States will further boost its results.
The Global Housing segment will benefit from an increase in lender-placed policies in-force as well as higher average insured values and premium rates. In this segment, the business is expected to grow mid to high-single-digits in 2023 and 2024. The top-line growth is likely to be driven by higher net earned premiums, fees and other income and net investment income.
Net investment income is expected to gain from higher yields on fixed maturity securities, cash and cash equivalents, and higher income from commercial mortgage loans on real estate due to improved invested assets.
Assurant has a strong capital management policy. Its solid capital position supports effective capital deployment. At present, $245 million remains unused under the repurchase authorization. The insurer expects to deploy capital primarily to support business growth by funding investments, mergers and acquisitions and returning capital to shareholders in the form of share repurchases and dividends.
Stocks to Consider
Some better-ranked stocks from the insurance industry are Arch Capital Group Ltd. (ACGL - Free Report) , Axis Capital Holdings Limited (AXS - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) . While Arch Capital and Axis Capital sport a Zacks Rank #1 (Strong Buy) each, Cincinnati Financial carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 26.83%. In the past year, ACGL has gained 62.7%.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings per share is pegged at $6.58 and $7.25, indicating a year-over-year increase of 35.1% and 10.2%, respectively.
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 9.75%. In the past year, AXS has gained 0.8%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.18 and $9.17, indicating a year-over-year increase of 40.7% and 12.1%, respectively.
Cincinnati Financial has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 25.25%. In the past year, CINF has lost 0.8%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 earnings per share is pegged at $5 and $5.88, indicating a year-over-year increase of 17.9% and 17.6%, respectively.