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Here's Why You Should Buy Employers Holdings (EIG) Stock
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Employers Holdings’ (EIG - Free Report) niche focus on low-to-medium hazard risk small businesses, prudent pricing, investment in technology, solid capital position and favorable growth estimates make it worth adding to one’s portfolio.
EIG has a solid record of delivering an earnings surprise in the last five quarters.
This mono-line writer of workers’ compensation (WC) insurance focused on low-to-medium hazard risk small businesses is well poised to capitalize on the growth opportunities offered by the $50 billion-plus market. It has a VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
Zacks Rank & Price Performance
Employers Holdings currently carries a Zacks Rank #2 (Buy). The stock has risen 9.8% in the past three months compared with the industry’s increase of 10.6%.
Optimistic Growth Projection
The Zacks Consensus Estimate for 2023 earnings is pegged at $3.43, indicating an increase of 17.1% on 20.5% higher revenues of $0.9 billion. The consensus estimate for 2024 earnings is pegged at $3.53, indicating an increase of 2.9% on 9.4% higher revenues of $0.9 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 has moved 6.2% and 2.9% north, respectively in the past 30 days, reflecting analyst optimism.
Business Tailwinds
By expanding underwriting appetite, EIG targets accelerating premium growth. The insurer is expanding its Employers and Cerity underwriting capacity. Its disciplined underwriting has helped it to have a solid favorable reserve. This coupled with prudent fixed expense management should drive profitability.
Given accelerated digitalization in the insurance industry, EIG stays focused on investing in technology and digitalization to scale up its business.
Being a beneficiary of an improving rate environment, EIG should continue to enjoy the benefits of a solid investment portfolio. Notably, EIG’s financial flexibility is backed by a superior quality and highly liquid investment portfolio.
The insurer pays regular dividends and increases the same. It also pays special dividends, reflecting operational excellence. Its current dividend yield of 2.8% is higher than the industry average of 2.3%.
Attractive Valuation
Employers Holdings’ shares are trading at a price-to-book multiple of 1.09, lower than the industry average of 1.88.
The company has a 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 combined with a Zacks Rank #1 (Strong Buy) or #2 offer better returns.
Before its valuation expands, it is advisable to take a position in the stock.
ProAssurance has a decent record of beating earnings estimates in two of the last four quarters and missing twice. PRA has gained 2% so far this year.
The Zacks Consensus Estimate for PRA’s 2024 earnings per share is pegged at 83 cents, indicating a year-over-year jump of 143.5%.
Cincinnati Financial has a decent track record of beating earnings estimates in three of the last four quarters and missing once, the average beat being 25.25%. Year to date, CINF has lost 0.6%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 earnings per share is pegged at $5.01 and $5.88, suggesting year-over-year growth of 18.2% and 17.5%, respectively.
Chubb has a solid record of beating earnings estimates in three of the last four quarters and missing in one, the average beat being 3.36%. Year to date, CB has lost 4.7%.
The Zacks Consensus Estimate for CB’s 2023 and 2024 earnings per share is pegged at $18.18 and $19.86, implying year-over-year increases of 19.3% and 9.2%, respectively.
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Here's Why You Should Buy Employers Holdings (EIG) Stock
Employers Holdings’ (EIG - Free Report) niche focus on low-to-medium hazard risk small businesses, prudent pricing, investment in technology, solid capital position and favorable growth estimates make it worth adding to one’s portfolio.
EIG has a solid record of delivering an earnings surprise in the last five quarters.
This mono-line writer of workers’ compensation (WC) insurance focused on low-to-medium hazard risk small businesses is well poised to capitalize on the growth opportunities offered by the $50 billion-plus market. It has a VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
Zacks Rank & Price Performance
Employers Holdings currently carries a Zacks Rank #2 (Buy). The stock has risen 9.8% in the past three months compared with the industry’s increase of 10.6%.
Optimistic Growth Projection
The Zacks Consensus Estimate for 2023 earnings is pegged at $3.43, indicating an increase of 17.1% on 20.5% higher revenues of $0.9 billion. The consensus estimate for 2024 earnings is pegged at $3.53, indicating an increase of 2.9% on 9.4% higher revenues of $0.9 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 has moved 6.2% and 2.9% north, respectively in the past 30 days, reflecting analyst optimism.
Business Tailwinds
By expanding underwriting appetite, EIG targets accelerating premium growth. The insurer is expanding its Employers and Cerity underwriting capacity. Its disciplined underwriting has helped it to have a solid favorable reserve. This coupled with prudent fixed expense management should drive profitability.
Given accelerated digitalization in the insurance industry, EIG stays focused on investing in technology and digitalization to scale up its business.
Being a beneficiary of an improving rate environment, EIG should continue to enjoy the benefits of a solid investment portfolio. Notably, EIG’s financial flexibility is backed by a superior quality and highly liquid investment portfolio.
The insurer pays regular dividends and increases the same. It also pays special dividends, reflecting operational excellence. Its current dividend yield of 2.8% is higher than the industry average of 2.3%.
Attractive Valuation
Employers Holdings’ shares are trading at a price-to-book multiple of 1.09, lower than the industry average of 1.88.
The company has a 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 combined with a Zacks Rank #1 (Strong Buy) or #2 offer better returns.
Before its valuation expands, it is advisable to take a position in the stock.
Other Stocks to Consider
Some other top-ranked stocks from the insurance industry are ProAssurance (PRA - Free Report) , Cincinnati Financial (CINF - Free Report) and Chubb Limited (CB - Free Report) . ProAssurance currently flaunts a Zacks Rank #1, while Cincinnati Financial and Chubb carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
ProAssurance has a decent record of beating earnings estimates in two of the last four quarters and missing twice. PRA has gained 2% so far this year.
The Zacks Consensus Estimate for PRA’s 2024 earnings per share is pegged at 83 cents, indicating a year-over-year jump of 143.5%.
Cincinnati Financial has a decent track record of beating earnings estimates in three of the last four quarters and missing once, the average beat being 25.25%. Year to date, CINF has lost 0.6%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 earnings per share is pegged at $5.01 and $5.88, suggesting year-over-year growth of 18.2% and 17.5%, respectively.
Chubb has a solid record of beating earnings estimates in three of the last four quarters and missing in one, the average beat being 3.36%. Year to date, CB has lost 4.7%.
The Zacks Consensus Estimate for CB’s 2023 and 2024 earnings per share is pegged at $18.18 and $19.86, implying year-over-year increases of 19.3% and 9.2%, respectively.