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Here's Why Chubb (CB) Shares Are Attracting Investors Now
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Chubb Limited (CB - Free Report) is well-positioned for growth, driven by a compelling portfolio, strong renewal retention, positive rate increases, strategic initiatives to fuel profitability, solid capital position and favorable growth estimates.
Earnings Surprise History
Chubb’s earnings beat estimates in each of the last four quarters, the average being 23.44%.
Return on Equity
Return on equity of Chubb was 16.4% in the trailing 12 months, which expanded 390 basis points year over year and was better than the industry average of 7.1%.
Zacks Rank & Price Performance
Chubb currently carries a Zacks Rank #2 (Buy). Over the past year, the stock has gained 20.7% compared with the industry’s growth of 28.3%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for 2024 earnings is pegged at $23.09 per share, indicating a 9.7% increase from the year-ago reported figure on 6.7% higher revenues of $58.49 billion.
The expected long-term earnings growth is pegged at 10%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 1.9% north each in the past 30 days, reflecting analyst optimism.
Style Score
The company 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.
Business Tailwinds
Premiums should continue benefiting from strong commercial businesses, commercial P&C rate increases, improving underwriting margins, new business and strong renewal retention. Chubb has an extensive local presence globally. Its several distribution agreements have expanded its network, thus boosting its market presence.
Chubb’s growth strategy includes an increased focus on capitalizing on the potential of middle-market businesses (both domestic and international), along with enhancing the traditional core package and specialty products.
CB has been focused on expanding its presence in the Asia Pacific region. The acquisition of the life and non-life insurance companies of Cigna Corporation in seven Asia Pacific markets testifies to this strategic effort. The addition of Cigna’s business will boost Chubb’s A&H business and expand its Asia life insurance presence.
With an improving rate environment, a solid investment portfolio and a positive operating cash flow, investment income is poised to grow. Chubb expects quarterly adjusted net investment income to have a run rate of approximately $1.45 billion and continued growth thereafter.
The strong capital and liquidity position enables Chubb to enhance its shareholder value via share buybacks and dividend payouts. The company’s current dividend yield of 1.3% was better than the industry average of 0.2%, which makes the stock an attractive pick for yield-seeking investors. Total capital returned to shareholders for 2023 was $3.88 billion, including share repurchases of $2.48 billion at an average purchase price of $209.52 per share and dividends of $1.40 billion.
Attractive Valuation
CB shares are trading at a price to book value multiple of 1.61, lower than the industry average of 1.65. It also has an impressive Value Score of B. This style score helps find the most attractive value stocks.
Other Stocks to Consider
Some other top-ranked stocks from the insurance industry are Axis CapitalHoldings 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%. Over the past year, the insurer has gained 1.3%.
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%. Over the past year, the insurer has rallied 40.1%.
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%. Over the past year, ACGL has jumped 23.9%.
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 Chubb (CB) Shares Are Attracting Investors Now
Chubb Limited (CB - Free Report) is well-positioned for growth, driven by a compelling portfolio, strong renewal retention, positive rate increases, strategic initiatives to fuel profitability, solid capital position and favorable growth estimates.
Earnings Surprise History
Chubb’s earnings beat estimates in each of the last four quarters, the average being 23.44%.
Return on Equity
Return on equity of Chubb was 16.4% in the trailing 12 months, which expanded 390 basis points year over year and was better than the industry average of 7.1%.
Zacks Rank & Price Performance
Chubb currently carries a Zacks Rank #2 (Buy). Over the past year, the stock has gained 20.7% compared with the industry’s growth of 28.3%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for 2024 earnings is pegged at $23.09 per share, indicating a 9.7% increase from the year-ago reported figure on 6.7% higher revenues of $58.49 billion.
The expected long-term earnings growth is pegged at 10%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2024 and 2025 earnings has moved 1.9% north each in the past 30 days, reflecting analyst optimism.
Style Score
The company 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.
Business Tailwinds
Premiums should continue benefiting from strong commercial businesses, commercial P&C rate increases, improving underwriting margins, new business and strong renewal retention. Chubb has an extensive local presence globally. Its several distribution agreements have expanded its network, thus boosting its market presence.
Chubb’s growth strategy includes an increased focus on capitalizing on the potential of middle-market businesses (both domestic and international), along with enhancing the traditional core package and specialty products.
CB has been focused on expanding its presence in the Asia Pacific region. The acquisition of the life and non-life insurance companies of Cigna Corporation in seven Asia Pacific markets testifies to this strategic effort. The addition of Cigna’s business will boost Chubb’s A&H business and expand its Asia life insurance presence.
With an improving rate environment, a solid investment portfolio and a positive operating cash flow, investment income is poised to grow. Chubb expects quarterly adjusted net investment income to have a run rate of approximately $1.45 billion and continued growth thereafter.
The strong capital and liquidity position enables Chubb to enhance its shareholder value via share buybacks and dividend payouts. The company’s current dividend yield of 1.3% was better than the industry average of 0.2%, which makes the stock an attractive pick for yield-seeking investors. Total capital returned to shareholders for 2023 was $3.88 billion, including share repurchases of $2.48 billion at an average purchase price of $209.52 per share and dividends of $1.40 billion.
Attractive Valuation
CB shares are trading at a price to book value multiple of 1.61, lower than the industry average of 1.65. It also has an impressive Value Score of B. This style score helps find the most attractive value stocks.
Other Stocks to Consider
Some other top-ranked stocks from the 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%. Over the past year, the insurer has gained 1.3%.
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%. Over the past year, the insurer has rallied 40.1%.
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%. Over the past year, ACGL has jumped 23.9%.
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.