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Here's Why Kinsale (KNSL) Stock is Investors' Favorite Now
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Kinsale Capital (KNSL - Free Report) shares have gained 32.3% in a year, outperforming the industry’s increase of 11.7%. The Finance sector and the Zacks S&P 500 index have risen 12.3% and 21.9% in the said time frame, respectively. With a market capitalization of $8.4 billion, the average volume of shares traded in the last three months was 0.2 million.
Focus on the excess and supply (E&S) market, prudent underwriting, lower expense ratio, growth in the investment portfolio and effective capital deployment continue to drive this Zacks Rank #2 (Buy) insurer.
The insurer’s earnings have increased 44.1% in the past five years, better than the industry average of 17.1%. KNSL has a solid surprise history, beating earnings estimates in the last 12 reported quarters.
Kinsale Capital’s return on equity (ROE) for the trailing 12 months is 31.2%, comparing favorably with the industry’s 7.2%, reflecting the company’s efficiency in utilizing shareholders’ funds. This insurer targets mid-teens ROE over the long term.
Also, the return on invested capital has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting KNSL’s efficiency in utilizing funds to generate income.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Kinsale Capital’s 2024 earnings is pegged at $14.72 per share, indicating a 22% increase from the year-ago estimated figure. Revenues are expected to be $1.5 billion. It has a Growth Score of A. We expect 2025 bottom line to witness a three-year CAGR of 22.4%.
Kinsale has been generating improving premiums for some time. Its solid presence across the U.S. E&S market and high retention rates arising from contract renewals should continue to drive premiums. We expect 2025 net written premiums to witness a three-year CAGR of 19.7%. Kinsale Capital noted that the E&S market has witnessed significant growth and generated better underwriting results than the broader P&C industry.
Intensified focus on the E&S market across the United States helped KNSL to deliver improved margins and lower loss ratios. The insurer targets clients with small-sized and medium-sized accounts with better pricing and less prone to competition. Kinsale Capital estimates low double-digit rate increases across the book of business.
Kinsale Capital remains well-poised to benefit from continued market dislocation, aiding improved submission flows and better pricing decisions.
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.
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, the insurer has increased dividends since 2017 at a seven-year CAGR (2016-2023) of 13.7%. Notably, its free cash flow conversion has remained more than 85% over the last many quarters, reflecting its solid earnings.
CNA Financial delivered a trailing four-quarter average earnings surprise of 9.24%. The stock has gained 1.2% in a year.
The Zacks Consensus Estimate for CNA’s 2024 earnings indicates an increase of 7.4% from the 2023 estimated figure. The expected long-term earnings growth rate is 5%. The consensus estimate for 2024 earnings has moved up 1.5% in the past 30 days.
Chubb’s earnings surpassed estimates in three of the last four quarters while missing in one, the average being 6.51%. The stock has gained 1.9% in a year.
The Zacks Consensus Estimate for Chubb’s 2024 earnings implies a rise of 7.4% from the 2023 estimated figure. The expected long-term earnings growth rate is 10%. The consensus estimate for CB’s 2024 earnings has moved up 0.4% in the past 60 days.
Berkshire delivered a trailing four-quarter average earnings surprise of 0.20%. In a year, the stock has gained 15.9%.
The Zacks Consensus Estimate for BRK.B’s 2024 earnings indicates an increase of 11.1% from the 2023 estimated figure. The expected long-term earnings growth rate is 7%. The consensus estimate for BRK.B’s 2024 earnings has moved up 2.8% in the past 30 days.
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Here's Why Kinsale (KNSL) Stock is Investors' Favorite Now
Kinsale Capital (KNSL - Free Report) shares have gained 32.3% in a year, outperforming the industry’s increase of 11.7%. The Finance sector and the Zacks S&P 500 index have risen 12.3% and 21.9% in the said time frame, respectively. With a market capitalization of $8.4 billion, the average volume of shares traded in the last three months was 0.2 million.
Focus on the excess and supply (E&S) market, prudent underwriting, lower expense ratio, growth in the investment portfolio and effective capital deployment continue to drive this Zacks Rank #2 (Buy) insurer.
The insurer’s earnings have increased 44.1% in the past five years, better than the industry average of 17.1%. KNSL has a solid surprise history, beating earnings estimates in the last 12 reported quarters.
Kinsale Capital’s return on equity (ROE) for the trailing 12 months is 31.2%, comparing favorably with the industry’s 7.2%, reflecting the company’s efficiency in utilizing shareholders’ funds. This insurer targets mid-teens ROE over the long term.
Also, the return on invested capital has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting KNSL’s efficiency in utilizing funds to generate income.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Kinsale Capital’s 2024 earnings is pegged at $14.72 per share, indicating a 22% increase from the year-ago estimated figure. Revenues are expected to be $1.5 billion. It has a Growth Score of A. We expect 2025 bottom line to witness a three-year CAGR of 22.4%.
Kinsale has been generating improving premiums for some time. Its solid presence across the U.S. E&S market and high retention rates arising from contract renewals should continue to drive premiums. We expect 2025 net written premiums to witness a three-year CAGR of 19.7%. Kinsale Capital noted that the E&S market has witnessed significant growth and generated better underwriting results than the broader P&C industry.
Intensified focus on the E&S market across the United States helped KNSL to deliver improved margins and lower loss ratios. The insurer targets clients with small-sized and medium-sized accounts with better pricing and less prone to competition. Kinsale Capital estimates low double-digit rate increases across the book of business.
Kinsale Capital remains well-poised to benefit from continued market dislocation, aiding improved submission flows and better pricing decisions.
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.
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, the insurer has increased dividends since 2017 at a seven-year CAGR (2016-2023) of 13.7%. Notably, its free cash flow conversion has remained more than 85% over the last many quarters, reflecting its solid earnings.
Other Stocks to Consider
Some other top-ranked stocks from the same space are CNA Financial Corporation (CNA - Free Report) , Chubb Limited (CB - Free Report) and Berkshire Hathaway (BRK.B - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CNA Financial delivered a trailing four-quarter average earnings surprise of 9.24%. The stock has gained 1.2% in a year.
The Zacks Consensus Estimate for CNA’s 2024 earnings indicates an increase of 7.4% from the 2023 estimated figure. The expected long-term earnings growth rate is 5%. The consensus estimate for 2024 earnings has moved up 1.5% in the past 30 days.
Chubb’s earnings surpassed estimates in three of the last four quarters while missing in one, the average being 6.51%. The stock has gained 1.9% in a year.
The Zacks Consensus Estimate for Chubb’s 2024 earnings implies a rise of 7.4% from the 2023 estimated figure. The expected long-term earnings growth rate is 10%. The consensus estimate for CB’s 2024 earnings has moved up 0.4% in the past 60 days.
Berkshire delivered a trailing four-quarter average earnings surprise of 0.20%. In a year, the stock has gained 15.9%.
The Zacks Consensus Estimate for BRK.B’s 2024 earnings indicates an increase of 11.1% from the 2023 estimated figure. The expected long-term earnings growth rate is 7%. The consensus estimate for BRK.B’s 2024 earnings has moved up 2.8% in the past 30 days.