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Here's Why Investors May Consider Betting on Chubb (CB) Now
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Chubb Limited (CB - Free Report) has been in investors’ good books owing to new business and strong renewal retention, acquisitions, positive cash flow, higher reinvestment rates, improved capital position and effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for 2023 and 2024 earnings per share is pegged at $18.18 and $19.86, indicating an increase of 19.3% and 9.2% from the year-ago reported figure, driven by 8.7% and 6.4% higher revenues of $48.30 billion and $51.41 billion, respectively.
Northbound Estimate Revision
The Zacks Consensus Estimate for Chubb’s 2023 and 2024 earnings has moved 1.2% and 0.5% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
Earnings Surprise History
Chubb has a decent earnings surprise history, beating estimates in three of the last four quarters and missing in one, the average being 3.36%.Zacks
Rank & Price Performance
CB currently carries a Zacks Rank #2 (Buy). In the past year, the stock has gained 6.8% compared with the industry’s rise of 20.9%.
Image Source: Zacks Investment Research
Business Tailwinds
Chubb continues to witness robust premium revenue growth globally. We expect the momentum to continue, driven by its commercial business, consumer property and casualty (P&C) business and International Life business.
Continued commercial P&C rate increases, improving underwriting margins, new business and strong renewal retention should continue to support premium growth.
Chubb Limited, the world’s largest publicly traded P&C insurer, has always considered acquisition as an effective strategy for inorganic growth and global expansion. The insurer closed 17 acquisitions over the past 15 years. In 2022, the company acquired the life and non-life insurance companies that house the personal accident, supplemental health and life insurance business of Cigna Corporation in several Asian markets. This complementary strategic acquisition expands the company’s presence and advances its long-term growth opportunity in Asia.
On Jul 1, 2023, CB closed an additional 5.4% ownership interests in Huatai Group, which brings total aggregate ownership to approximately 69.6%. The company expects the closing of additional shares this quarter, which will bring ownership up to 83.2%.
Chubb has been witnessing substantial improvement in net investment income over the last few years. Riding on higher reinvestment rates on fixed maturities, the metric should continue to increase. Adjusted net investment income is likely to improve owing to strong cash flow, accelerated portfolio turnover and higher reinvestment rates. In the third quarter, the company expects adjusted net investment income to increase from $1.24 billion to around $1.27 billion on a recurring basis and continue to grow.
Chubb boasts a strong capital position, with sufficient cash generation capabilities. Its solid underlying performance produced strong operating cash flow. The company continues to have an exceptionally strong capital position, a conservative level of leverage and an operating cash flow of $11 billion in 2022 and $4.76 billion in the first half of 2023, reflecting strong liquidity.
CB’s strong capital position and sufficient cash generation capabilities support effective capital deployment. This, in turn, has helped the insurer increase dividends for the last 30 years. The dividend yield is 1.7%, which is better than the industry average of 0.3%. As of Jul 27, 2023, the company is left with $5 billion under its share repurchase authorization.
Attractive Valuation
Chubb has an impressive Value Score of B. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer better returns.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are Arch Capital Group Ltd. (ACGL - Free Report) , Axis Capital Holdings Limited (AXS - Free Report) and Kinsale Capital Group, Inc. (KNSL - Free Report) . While Arch Capital and Axis Capital sport a Zacks Rank #1 each, Kinsale Capital carries Zacks Rank #2 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 rallied 65.6%.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings per share is pegged at $6.73 and $7.43, indicating a year-over-year increase of 38.1% and 10.4%, 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 4%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.41 and $9.31, indicating a year-over-year increase of 44.7% and 10.7%, respectively.
Kinsale Capital beat estimates in each of the last four quarters, the average being 14.88%. In the past year, KNSL has rallied 54.9%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 8.5% and 7.8% north, respectively, in the past 30 days, reflecting analysts’ optimism.
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Here's Why Investors May Consider Betting on Chubb (CB) Now
Chubb Limited (CB - Free Report) has been in investors’ good books owing to new business and strong renewal retention, acquisitions, positive cash flow, higher reinvestment rates, improved capital position and effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for 2023 and 2024 earnings per share is pegged at $18.18 and $19.86, indicating an increase of 19.3% and 9.2% from the year-ago reported figure, driven by 8.7% and 6.4% higher revenues of $48.30 billion and $51.41 billion, respectively.
Northbound Estimate Revision
The Zacks Consensus Estimate for Chubb’s 2023 and 2024 earnings has moved 1.2% and 0.5% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
Earnings Surprise History
Chubb has a decent earnings surprise history, beating estimates in three of the last four quarters and missing in one, the average being 3.36%.Zacks
Rank & Price Performance
CB currently carries a Zacks Rank #2 (Buy). In the past year, the stock has gained 6.8% compared with the industry’s rise of 20.9%.
Image Source: Zacks Investment Research
Business Tailwinds
Chubb continues to witness robust premium revenue growth globally. We expect the momentum to continue, driven by its commercial business, consumer property and casualty (P&C) business and International Life business.
Continued commercial P&C rate increases, improving underwriting margins, new business and strong renewal retention should continue to support premium growth.
Chubb Limited, the world’s largest publicly traded P&C insurer, has always considered acquisition as an effective strategy for inorganic growth and global expansion. The insurer closed 17 acquisitions over the past 15 years. In 2022, the company acquired the life and non-life insurance companies that house the personal accident, supplemental health and life insurance business of Cigna Corporation in several Asian markets. This complementary strategic acquisition expands the company’s presence and advances its long-term growth opportunity in Asia.
On Jul 1, 2023, CB closed an additional 5.4% ownership interests in Huatai Group, which brings total aggregate ownership to approximately 69.6%. The company expects the closing of additional shares this quarter, which will bring ownership up to 83.2%.
Chubb has been witnessing substantial improvement in net investment income over the last few years. Riding on higher reinvestment rates on fixed maturities, the metric should continue to increase. Adjusted net investment income is likely to improve owing to strong cash flow, accelerated portfolio turnover and higher reinvestment rates. In the third quarter, the company expects adjusted net investment income to increase from $1.24 billion to around $1.27 billion on a recurring basis and continue to grow.
Chubb boasts a strong capital position, with sufficient cash generation capabilities. Its solid underlying performance produced strong operating cash flow. The company continues to have an exceptionally strong capital position, a conservative level of leverage and an operating cash flow of $11 billion in 2022 and $4.76 billion in the first half of 2023, reflecting strong liquidity.
CB’s strong capital position and sufficient cash generation capabilities support effective capital deployment. This, in turn, has helped the insurer increase dividends for the last 30 years. The dividend yield is 1.7%, which is better than the industry average of 0.3%. As of Jul 27, 2023, the company is left with $5 billion under its share repurchase authorization.
Attractive Valuation
Chubb has an impressive Value Score of B. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or #2, offer better returns.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are Arch Capital Group Ltd. (ACGL - Free Report) , Axis Capital Holdings Limited (AXS - Free Report) and Kinsale Capital Group, Inc. (KNSL - Free Report) . While Arch Capital and Axis Capital sport a Zacks Rank #1 each, Kinsale Capital carries Zacks Rank #2 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 rallied 65.6%.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings per share is pegged at $6.73 and $7.43, indicating a year-over-year increase of 38.1% and 10.4%, 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 4%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.41 and $9.31, indicating a year-over-year increase of 44.7% and 10.7%, respectively.
Kinsale Capital beat estimates in each of the last four quarters, the average being 14.88%. In the past year, KNSL has rallied 54.9%.
The Zacks Consensus Estimate for 2023 and 2024 has moved 8.5% and 7.8% north, respectively, in the past 30 days, reflecting analysts’ optimism.