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Here's Why You Should Buy Kinsale Capital (KNSL) Stock Now
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Kinsale Capital Group, Inc.’s (KNSL - Free Report) solid Excess & Surplus (“E&S”) market, strong premium income, favorable growth estimates, operating cash flows and prudent capital deployment make it worth adding to one’s portfolio.
Growth Projections
The Zacks Consensus Estimate for Kinsale Capital’s 2023 earnings is pegged at $12.06 per share, indicating a 54.6% increase from the year-ago reported figure on 47.3% higher revenues of $1.21 billion. The consensus estimate for 2024 earnings is pegged at $14.72 per share, indicating a 22% increase from the year-ago reported figure on 26.3% higher revenues of $1.53 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 has moved 0.8% and 1.3% 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 14.25%.
Zacks Rank & Price Performance
Shares of this Zacks Rank #2 (Buy) property and casualty insurer have gained 16.4% in a year, outperforming the industry’s growth of 10.3%. We expect the company’s policy to ramp up its growth profile and capital position and drive shares higher.
Image Source: Zacks Investment Research
Style Score
KNSL has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, 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.
Return on Equity (ROE)
Kinsale Capital’s operating ROE of 31.2% expanded 660 basis points (bps) year over year in the second quarter and remained above the industry’s ROE of 7.1%, reflecting its tactical efficiency in using its shareholders’ funds. Annualized operating return on equity was 32.1% for the nine months ended Sep 30, 2023, which expanded 780 bps year over year. The increase was attributable largely to continued profitable growth from continuing favorable market conditions and rate increases.
Business Tailwinds
Kinsale Capital’s premium should continue to benefit from its established presence across the E&S market of the United States, improved submission flows and high retention rates arising from contract renewals. KNSL anticipates 2023 to be the sixth calendar year in a row with double-digit industry-wide E&S premium growth.
The insurer targets clients with small and medium-sized accounts with better pricing and less prone to competition and estimates low double-digit rate increases across the book of business.
Given an improving rate environment, investment of the excess operating funds should help it build a robust investment portfolio.
Kinsale Capital enjoys the best combination of high growth and low combined ratio among its peers. KNSL targets a combined ratio in the mid-80s range over the long term. The insurer noted that the E&S market has witnessed significant growth and generated better underwriting results than the broader P&C industry.
A proprietary technology platform, which is likely to provide it with a competitive edge over other industry players and scalability in business, should help KNSL generate an improved expense ratio.
Banking on operational excellence, KNSL has increased dividends since 2017 at a seven-year CAGR (2016-2023) of 13.7%.
KNSL has an impressive Growth Score of A. This style score helps analyze the growth prospects of a company.
Arch Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 35.16%. In the past year, ACGL has gained 32.2%.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings per share is pegged at $7.70 and $7.78, indicating a year-over-year increase of 58.1% and 1.1%, 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 22.45%. In the past year, AXS has lost 3.4%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.56 and $9.53, indicating a year-over-year increase of 47.3% and 11.3%, 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 38.33%. In the past year, CINF has lost 4.2%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 earnings per share is pegged at $5.59 and $6.06, indicating a year-over-year increase of 31.8% and 8.3%, respectively.
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Here's Why You Should Buy Kinsale Capital (KNSL) Stock Now
Kinsale Capital Group, Inc.’s (KNSL - Free Report) solid Excess & Surplus (“E&S”) market, strong premium income, favorable growth estimates, operating cash flows and prudent capital deployment make it worth adding to one’s portfolio.
Growth Projections
The Zacks Consensus Estimate for Kinsale Capital’s 2023 earnings is pegged at $12.06 per share, indicating a 54.6% increase from the year-ago reported figure on 47.3% higher revenues of $1.21 billion. The consensus estimate for 2024 earnings is pegged at $14.72 per share, indicating a 22% increase from the year-ago reported figure on 26.3% higher revenues of $1.53 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 has moved 0.8% and 1.3% 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 14.25%.
Zacks Rank & Price Performance
Shares of this Zacks Rank #2 (Buy) property and casualty insurer have gained 16.4% in a year, outperforming the industry’s growth of 10.3%. We expect the company’s policy to ramp up its growth profile and capital position and drive shares higher.
Image Source: Zacks Investment Research
Style Score
KNSL has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, 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.
Return on Equity (ROE)
Kinsale Capital’s operating ROE of 31.2% expanded 660 basis points (bps) year over year in the second quarter and remained above the industry’s ROE of 7.1%, reflecting its tactical efficiency in using its shareholders’ funds.
Annualized operating return on equity was 32.1% for the nine months ended Sep 30, 2023, which expanded 780 bps year over year. The increase was attributable largely to continued profitable growth from continuing favorable market conditions and rate increases.
Business Tailwinds
Kinsale Capital’s premium should continue to benefit from its established presence across the E&S market of the United States, improved submission flows and high retention rates arising from contract renewals. KNSL anticipates 2023 to be the sixth calendar year in a row with double-digit industry-wide E&S premium growth.
The insurer targets clients with small and medium-sized accounts with better pricing and less prone to competition and estimates low double-digit rate increases across the book of business.
Given an improving rate environment, investment of the excess operating funds should help it build a robust investment portfolio.
Kinsale Capital enjoys the best combination of high growth and low combined ratio among its peers. KNSL targets a combined ratio in the mid-80s range over the long term. The insurer noted that the E&S market has witnessed significant growth and generated better underwriting results than the broader P&C industry.
A proprietary technology platform, which is likely to provide it with a competitive edge over other industry players and scalability in business, should help KNSL generate an improved expense ratio.
Banking on operational excellence, KNSL has increased dividends since 2017 at a seven-year CAGR (2016-2023) of 13.7%.
KNSL has an impressive Growth Score of A. 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 Arch Capital Group Ltd. (ACGL - Free Report) , Axis Capital Holdings Limited (AXS - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) , each carrying a 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 35.16%. In the past year, ACGL has gained 32.2%.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings per share is pegged at $7.70 and $7.78, indicating a year-over-year increase of 58.1% and 1.1%, 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 22.45%. In the past year, AXS has lost 3.4%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.56 and $9.53, indicating a year-over-year increase of 47.3% and 11.3%, 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 38.33%. In the past year, CINF has lost 4.2%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 earnings per share is pegged at $5.59 and $6.06, indicating a year-over-year increase of 31.8% and 8.3%, respectively.