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Assurant (AIZ) Rises 57.6% in a Year: Will the Rally Last?
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Assurant, Inc.’s (AIZ - Free Report) shares have rallied 57.6% in a year compared with the industry's growth of 27.3%. The Finance sector and the Zacks S&P 500 index have gained 26.1% and 27.7% in the said time frame, respectively.
With a market capitalization of $9.73 billion, the average volume of shares traded in the last three months was 0.3 million.
Image Source: Zacks Investment Research
The rally was largely driven by the well-performing Global Lifestyle business, growth of fee-based capital-light businesses, solid capital management and effective capital deployment.
This Zacks Rank #2 (Buy) multi-line insurer delivered a four-quarter average earnings surprise of 42.15%.
The Zacks Consensus Estimate for Assurant’s 2024 and 2025 earnings has moved 5.9% and 6.4% north, respectively, in the past 60 days, reflecting analysts’ optimism.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Assurant’s 2024 earnings per share indicates a year-over-year increase of 3.4% from the consensus estimate of 2023. The consensus estimate for revenues is pegged at $11.66 billion, implying a year-over-year improvement of 4.1% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 7.7% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $12.07 billion, implying a year-over-year improvement of 3.4% from the consensus mark of 2024.
Assurant’s focus on growing fee-based capital-light businesses that presently constitute 52% of segmental revenues bodes well for growth. Management estimates that contribution from the same will continue to grow in double digits over the longer term.
Better performance in Homeowners reflecting higher lender-placed net earned premiums should drive better results at Global Housing. At the same time, growth across Connected Living and Global Automotive should drive Global Lifestyle.
The insurer remains focused on ramping up the Connected Living platform, deploying innovative products and services, and adding new partnerships. These initiatives are expected to double the margins of Connected Living to 8% over the long term.
Investment income, which has been witnessing an increase in net investment income over the past few years, should benefit from higher yields on fixed-maturity securities.
AIZ has a solid capital management policy in place. The insurer has been increasing dividends for the last 19 straight years. From Jan 1 through Feb 2, 2024, Assurant repurchased shares for $10 million, with $664 million remaining under the current repurchase authorizations. The company expects share repurchases in the range of $200-$300 million for 2024. Notably, its free cash flow conversion has remained more than 100% over the last many quarters, reflecting its solid earnings.
Return on equity (ROE) is a measure reflecting how efficiently a company utilizes shareholders’ money. The multi-line insurer’s ROE of 18.4% improved 490 basis points year over year. The figure is better than the industry average of 13.2%.
Assurant shares are trading at a discount than the industry average. Its price-to-book value of 2.05X is lower than the industry average of 2.43X. Before the valuation expands, it is preferable to take a position in the stock.
AIZ has an impressive Value Score of A. Value stocks have a long history of showing superior returns. 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.
Enact Holdings delivered a four-quarter average earnings surprise of 24.59%. In a year, shares of ACT have soared 33.9%.
The Zacks Consensus Estimate for ACT’s 2024 and 2025 earnings has moved up 0.7% and 1.5%, respectively, in the past 30 days.
The Zacks Consensus Estimate for CNO Financial’s 2024 and 2025 earnings implies year-over-year growth of 2.5% and 7.1%, respectively, from the consensus estimate of the corresponding years. In a year, shares of CNO have jumped 20.8%.
CNO’s earnings surpassed estimates in two of the last four quarters and missed in the other two, the average surprise being 3.62%.
Horace Mann’s earnings surpassed estimates in three of the last four quarters and matched in the one, the average surprise being 15.24%. In a year, shares of HMN have gained 7.9%.
The Zacks Consensus Estimate for HMN’s 2024 and 2025 earnings implies year-over-year growth of 104.5% and 19%, respectively, from the consensus estimate of the corresponding years.
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Assurant (AIZ) Rises 57.6% in a Year: Will the Rally Last?
Assurant, Inc.’s (AIZ - Free Report) shares have rallied 57.6% in a year compared with the industry's growth of 27.3%. The Finance sector and the Zacks S&P 500 index have gained 26.1% and 27.7% in the said time frame, respectively.
With a market capitalization of $9.73 billion, the average volume of shares traded in the last three months was 0.3 million.
Image Source: Zacks Investment Research
The rally was largely driven by the well-performing Global Lifestyle business, growth of fee-based capital-light businesses, solid capital management and effective capital deployment.
This Zacks Rank #2 (Buy) multi-line insurer delivered a four-quarter average earnings surprise of 42.15%.
The Zacks Consensus Estimate for Assurant’s 2024 and 2025 earnings has moved 5.9% and 6.4% north, respectively, in the past 60 days, reflecting analysts’ optimism.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Assurant’s 2024 earnings per share indicates a year-over-year increase of 3.4% from the consensus estimate of 2023. The consensus estimate for revenues is pegged at $11.66 billion, implying a year-over-year improvement of 4.1% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 7.7% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $12.07 billion, implying a year-over-year improvement of 3.4% from the consensus mark of 2024.
Assurant’s focus on growing fee-based capital-light businesses that presently constitute 52% of segmental revenues bodes well for growth. Management estimates that contribution from the same will continue to grow in double digits over the longer term.
Better performance in Homeowners reflecting higher lender-placed net earned premiums should drive better results at Global Housing. At the same time, growth across Connected Living and Global Automotive should drive Global Lifestyle.
The insurer remains focused on ramping up the Connected Living platform, deploying innovative products and services, and adding new partnerships. These initiatives are expected to double the margins of Connected Living to 8% over the long term.
Investment income, which has been witnessing an increase in net investment income over the past few years, should benefit from higher yields on fixed-maturity securities.
AIZ has a solid capital management policy in place. The insurer has been increasing dividends for the last 19 straight years. From Jan 1 through Feb 2, 2024, Assurant repurchased shares for $10 million, with $664 million remaining under the current repurchase authorizations. The company expects share repurchases in the range of $200-$300 million for 2024. Notably, its free cash flow conversion has remained more than 100% over the last many quarters, reflecting its solid earnings.
Return on equity (ROE) is a measure reflecting how efficiently a company utilizes shareholders’ money. The multi-line insurer’s ROE of 18.4% improved 490 basis points year over year. The figure is better than the industry average of 13.2%.
Assurant shares are trading at a discount than the industry average. Its price-to-book value of 2.05X is lower than the industry average of 2.43X. Before the valuation expands, it is preferable to take a position in the stock.
AIZ has an impressive Value Score of A. Value stocks have a long history of showing superior returns. 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.
Other Stocks to Consider
Some other top-ranked stocks from the multi-line insurance industry are Enact Holdings (ACT - Free Report) , CNO Financial Group (CNO - Free Report) and Horace Mann Educators Corporation (HMN - Free Report) , each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Enact Holdings delivered a four-quarter average earnings surprise of 24.59%. In a year, shares of ACT have soared 33.9%.
The Zacks Consensus Estimate for ACT’s 2024 and 2025 earnings has moved up 0.7% and 1.5%, respectively, in the past 30 days.
The Zacks Consensus Estimate for CNO Financial’s 2024 and 2025 earnings implies year-over-year growth of 2.5% and 7.1%, respectively, from the consensus estimate of the corresponding years. In a year, shares of CNO have jumped 20.8%.
CNO’s earnings surpassed estimates in two of the last four quarters and missed in the other two, the average surprise being 3.62%.
Horace Mann’s earnings surpassed estimates in three of the last four quarters and matched in the one, the average surprise being 15.24%. In a year, shares of HMN have gained 7.9%.
The Zacks Consensus Estimate for HMN’s 2024 and 2025 earnings implies year-over-year growth of 104.5% and 19%, respectively, from the consensus estimate of the corresponding years.