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Reasons Why Investors Should Retain Kinsale Capital (KNSL) for Now
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Kinsale Capital Group, Inc.’s (KNSL - Free Report) focus on the excess and supply (E&S) market, prudent underwriting, lower expense ratio, growth in the investment portfolio and effective capital deployment make it worth retaining in one’s portfolio.
Optimistic Growth Projection
The consensus estimate for Kinsale Capital’s 2024 earnings per share indicates a year-over-year increase of 22% from the consensus estimate of 2023. The consensus estimate for 2024 revenues is pinned at $1.56 billion, implying a year-over-year improvement of 27.9% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 20.9% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $1.89 billion, implying a year-over-year improvement of 21% from the consensus mark of 2024.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2024 and 2025 has moved 3.4% and 2.9% north, respectively, in the past 60 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 12.29%.
Zacks Rank & Price Performance
Shares of this Zacks Rank #3 (Hold) property and casualty (P&C) insurer have risen 42.7% in a year compared with the industry’s growth of 26.2%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Kinsale Capital’s ROE for the trailing 12 months is 31.5%, which compares favorably with the industry’s 7.3%, reflecting the company’s efficiency in utilizing shareholders’ funds. This insurer targets mid-teens ROE over the long term.
Business Tailwinds
A strong presence across the E&S market in the United States and high retention rates stemming from contract renewals should help KNSL to continue generating improved premiums.
Management noted that the E&S market has witnessed significant growth and generated better underwriting results than the broader P&C industry. The insurer remains well-poised to benefit from continued market dislocation, aiding improved submission flows and better pricing decisions.
KNSL’s solid market presence helped it 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. Management estimates low double-digit rate increases across the book of business.
The investment result should continue to benefit from an improved rate environment as well as investment of the excess operating funds at higher rates.
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 that supports a solid capital position, the insurer has increased dividends since 2017 at a seven-year (2017-2024) CAGR of 12%. Notably, its free cash flow conversion has remained more than 85% over the last many quarters, reflecting its solid earnings.
KNSL has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
HCI Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 522.51%. In the past year, shares of HCI have surged 117.8%.
The Zacks Consensus Estimate for HCI’s 2024 and 2025 earnings implies year-over-year growth of 37.9% and 11.6%, respectively, from the consensus estimate of the corresponding years.
Palomar Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 11.12%. In the past year, shares of PLMR have soared 40.3%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings implies year-over-year growth of 16.2% and 18%, respectively, from the consensus estimate of the corresponding years.
Mercury General has a solid track record of beating earnings estimates in three of the trailing four quarters and missed in one, the average being 3,417.48%. In the past year, shares of MCY have rallied 60%.
The Zacks Consensus Estimate for MCY’s 2024 and 2025 earnings implies year-over-year growth of 866.67% and 34.48%, respectively, from the consensus estimate of the corresponding years.
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Reasons Why Investors Should Retain Kinsale Capital (KNSL) for Now
Kinsale Capital Group, Inc.’s (KNSL - Free Report) focus on the excess and supply (E&S) market, prudent underwriting, lower expense ratio, growth in the investment portfolio and effective capital deployment make it worth retaining in one’s portfolio.
Optimistic Growth Projection
The consensus estimate for Kinsale Capital’s 2024 earnings per share indicates a year-over-year increase of 22% from the consensus estimate of 2023. The consensus estimate for 2024 revenues is pinned at $1.56 billion, implying a year-over-year improvement of 27.9% from the consensus mark of 2023.
The consensus estimate for 2025 earnings per share indicates a year-over-year increase of 20.9% from the consensus estimate of 2024. The consensus estimate for 2025 revenues is pinned at $1.89 billion, implying a year-over-year improvement of 21% from the consensus mark of 2024.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2024 and 2025 has moved 3.4% and 2.9% north, respectively, in the past 60 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 12.29%.
Zacks Rank & Price Performance
Shares of this Zacks Rank #3 (Hold) property and casualty (P&C) insurer have risen 42.7% in a year compared with the industry’s growth of 26.2%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Kinsale Capital’s ROE for the trailing 12 months is 31.5%, which compares favorably with the industry’s 7.3%, reflecting the company’s efficiency in utilizing shareholders’ funds. This insurer targets mid-teens ROE over the long term.
Business Tailwinds
A strong presence across the E&S market in the United States and high retention rates stemming from contract renewals should help KNSL to continue generating improved premiums.
Management noted that the E&S market has witnessed significant growth and generated better underwriting results than the broader P&C industry. The insurer remains well-poised to benefit from continued market dislocation, aiding improved submission flows and better pricing decisions.
KNSL’s solid market presence helped it 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. Management estimates low double-digit rate increases across the book of business.
The investment result should continue to benefit from an improved rate environment as well as investment of the excess operating funds at higher rates.
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 that supports a solid capital position, the insurer has increased dividends since 2017 at a seven-year (2017-2024) CAGR of 12%. Notably, its free cash flow conversion has remained more than 85% over the last many quarters, reflecting its solid earnings.
KNSL has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are HCI Group, Inc. (HCI - Free Report) , Palomar Holdings, Inc. (PLMR - Free Report) and Mercury General Corporation (MCY - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
HCI Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 522.51%. In the past year, shares of HCI have surged 117.8%.
The Zacks Consensus Estimate for HCI’s 2024 and 2025 earnings implies year-over-year growth of 37.9% and 11.6%, respectively, from the consensus estimate of the corresponding years.
Palomar Holdings has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 11.12%. In the past year, shares of PLMR have soared 40.3%.
The Zacks Consensus Estimate for PLMR’s 2024 and 2025 earnings implies year-over-year growth of 16.2% and 18%, respectively, from the consensus estimate of the corresponding years.
Mercury General has a solid track record of beating earnings estimates in three of the trailing four quarters and missed in one, the average being 3,417.48%. In the past year, shares of MCY have rallied 60%.
The Zacks Consensus Estimate for MCY’s 2024 and 2025 earnings implies year-over-year growth of 866.67% and 34.48%, respectively, from the consensus estimate of the corresponding years.