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Here's Why W.R. Berkley (WRB) Stock is an Attractive Pick Now
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W.R. Berkley Corporation’s (WRB - Free Report) higher premiums, lower claims frequency in certain lines of business, growth in exposure, effective capital deployment and sufficient liquidity make it worth adding to one’s portfolio.
Growth Projections
The Zacks Consensus Estimate for W.R. Berkley’s 2024 earnings is pegged at $5.99 per share, indicating a 21.7% increase from the year-ago reported figure on 9.5% higher revenues of $13.25 billion. The consensus estimate for 2025 earnings is pegged at $6.54 per share, indicating a 9.3% increase from the year-ago reported figure on 5.9% higher revenues of $14.04 billion.
Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 0.8% and 0.1% north, respectively, in the past seven days. This should instill investors' confidence in the stock.
Earnings Surprise History
WRB has a decent earnings surprise history. It surpassed earnings estimates in three of the last four quarters and missed in one, the average being 4.10%.
Zacks Rank & Price Performance
W.R. Berkley currently carries a Zacks Rank #2 (Buy). Year to date, the stock has gained 15.9% compared with the industry’s growth of 13%.
Image Source: Zacks Investment Research
Style Score
W.R. Berkley has a VGM Score of A. The 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.
Business Tailwinds
The Insurance business of W.R. Berkley is well-poised to grow, given higher premiums from other liability, short-tail lines, workers' compensation, commercial automobile and professional liability.
Higher premiums at casualty reinsurance, property reinsurance and monoline excess are likely to drive the performance of the Reinsurance & Monoline Excess segment. Underwriting income should gain from the compounding rate improvement above loss cost trends, along with growth in exposure and lower claims frequency in certain lines of business.
WRB is one of the largest commercial line property and casualty insurance providers. It has a solid balance sheet, with sufficient liquidity and robust cash flows that support growth initiatives and effective capital deployment.
Net investment income has witnessed a CAGR of 9.4% in the last eight years (2015-2023). The combination of a high-quality fixed maturity portfolio, along with solid operating cash flow, enabled the insurer to invest at higher interest rates. The metric should continue to improve as WRB also invests in alternative assets, such as private equity funds and direct real estate opportunities.
W.R. Berkley has a solid balance sheet with sufficient liquidity and strong cash flows, given its operational strength. A strong capital position enables the nation’s largest commercial line property casualty insurance provider to deploy capital via share repurchases, special dividends and dividend hikes that enhance shareholders' value.
In December 2023, the board approved a special cash dividend of 50 cents per share. This, along with two more special dividends paid out in January and October 2023, will bring the year’s total to $1.50 per share.
WRB has an impressive Value Score of B, reflecting an attractive valuation of the stock.
W.R. Berkley has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
In 2023, the operating return on equity expanded 150 basis points to 19.9%. The company targets a return on equity of 15% over the long term.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited (AXS - Free Report) , Mercury General Corporation (MCY - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) . While Axis Capital and Mercury General sport a Zacks Rank #1 each, Arch Capital carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital has a solid record of beating earnings estimates in each of the trailing four quarters, the average being 102.57%. Year to date, the insurer has gained 11.5%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 earnings per share is pegged at $10.10 and $11.07, indicating a year-over-year increase of 2.5% and 9.6%, respectively.
Mercury General beat estimates in three of the last four quarters and matched in one, the average being 3,417.48%. Year to date, the insurer has rallied 36.1%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 earnings per share is pegged at $2.90 and $3.90, indicating a year-over-year rise of 866.67% and 34.48%, respectively.
Arch Capital has a solid record of beating earnings estimates in each of the trailing four quarters, the average being 27.32%. Year to date, ACGL has jumped 14.9%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 revenues is pegged at $15.52 billion and $16.93 billion, indicating a year-over-year increase of 15% and 9%, respectively.
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Here's Why W.R. Berkley (WRB) Stock is an Attractive Pick Now
W.R. Berkley Corporation’s (WRB - Free Report) higher premiums, lower claims frequency in certain lines of business, growth in exposure, effective capital deployment and sufficient liquidity make it worth adding to one’s portfolio.
Growth Projections
The Zacks Consensus Estimate for W.R. Berkley’s 2024 earnings is pegged at $5.99 per share, indicating a 21.7% increase from the year-ago reported figure on 9.5% higher revenues of $13.25 billion. The consensus estimate for 2025 earnings is pegged at $6.54 per share, indicating a 9.3% increase from the year-ago reported figure on 5.9% higher revenues of $14.04 billion.
Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 0.8% and 0.1% north, respectively, in the past seven days. This should instill investors' confidence in the stock.
Earnings Surprise History
WRB has a decent earnings surprise history. It surpassed earnings estimates in three of the last four quarters and missed in one, the average being 4.10%.
Zacks Rank & Price Performance
W.R. Berkley currently carries a Zacks Rank #2 (Buy). Year to date, the stock has gained 15.9% compared with the industry’s growth of 13%.
Image Source: Zacks Investment Research
Style Score
W.R. Berkley has a VGM Score of A. The 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.
Business Tailwinds
The Insurance business of W.R. Berkley is well-poised to grow, given higher premiums from other liability, short-tail lines, workers' compensation, commercial automobile and professional liability.
Higher premiums at casualty reinsurance, property reinsurance and monoline excess are likely to drive the performance of the Reinsurance & Monoline Excess segment. Underwriting income should gain from the compounding rate improvement above loss cost trends, along with growth in exposure and lower claims frequency in certain lines of business.
WRB is one of the largest commercial line property and casualty insurance providers. It has a solid balance sheet, with sufficient liquidity and robust cash flows that support growth initiatives and effective capital deployment.
Net investment income has witnessed a CAGR of 9.4% in the last eight years (2015-2023). The combination of a high-quality fixed maturity portfolio, along with solid operating cash flow, enabled the insurer to invest at higher interest rates. The metric should continue to improve as WRB also invests in alternative assets, such as private equity funds and direct real estate opportunities.
W.R. Berkley has a solid balance sheet with sufficient liquidity and strong cash flows, given its operational strength. A strong capital position enables the nation’s largest commercial line property casualty insurance provider to deploy capital via share repurchases, special dividends and dividend hikes that enhance shareholders' value.
In December 2023, the board approved a special cash dividend of 50 cents per share. This, along with two more special dividends paid out in January and October 2023, will bring the year’s total to $1.50 per share.
WRB has an impressive Value Score of B, reflecting an attractive valuation of the stock.
W.R. Berkley has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
In 2023, the operating return on equity expanded 150 basis points to 19.9%. The company targets a return on equity of 15% over the long term.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are Axis Capital Holdings Limited (AXS - Free Report) , Mercury General Corporation (MCY - Free Report) and Arch Capital Group Ltd. (ACGL - Free Report) . While Axis Capital and Mercury General sport a Zacks Rank #1 each, Arch Capital carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axis Capital has a solid record of beating earnings estimates in each of the trailing four quarters, the average being 102.57%. Year to date, the insurer has gained 11.5%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 earnings per share is pegged at $10.10 and $11.07, indicating a year-over-year increase of 2.5% and 9.6%, respectively.
Mercury General beat estimates in three of the last four quarters and matched in one, the average being 3,417.48%. Year to date, the insurer has rallied 36.1%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 earnings per share is pegged at $2.90 and $3.90, indicating a year-over-year rise of 866.67% and 34.48%, respectively.
Arch Capital has a solid record of beating earnings estimates in each of the trailing four quarters, the average being 27.32%. Year to date, ACGL has jumped 14.9%.
The Zacks Consensus Estimate for the company’s 2024 and 2025 revenues is pegged at $15.52 billion and $16.93 billion, indicating a year-over-year increase of 15% and 9%, respectively.