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AIZ Rallies 12.5% in a Year: Time to Buy the Stock for Solid Returns?
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Key Takeaways
Assurant is focused on expanding its capital-light businesses, which contribute 52% of segment revenues.
AIZ's strong cash flow generation poise it well for sustained growth and long-term shareholder value creation.
Assurant's shares have gained 12.5% in the past year compared with the industry's growth of 9.2%.
Assurant, Inc. (AIZ - Free Report) shares have risen 12.5% in the past year compared with the industry's growth of 9.2%. The Finance sector and the Zacks S&P 500 index have returned 16.7% and 15.8%, respectively, in the said time frame.
With a market capitalization of $10.72 billion, the average volume of shares traded in the last three months was 0.5 million.
Image Source: Zacks Investment Research
AIZ Shares are Affordable
Assurant shares are trading at a discount compared with the multi-line insurance industry. Its forward price-to-earnings multiple of 1.97X is lower than the industry average of 2.19X, the Finance sector’s 4.03X and the Zacks S&P 500 Composite’s 8.37X. The insurer has a Value Score of A.
Shares of Enact Holdings, Inc. (ACT - Free Report) , MGIC Investment Corporation (MTG - Free Report) and Radian Group Inc. (RDN - Free Report) are also trading at a discount to the industry average.
Image Source: Zacks Investment Research
AIZ Trading Above 50-Day and 200-Day Moving Averages
Shares of Assurant closed at $212.50 on Aug. 15, near its 52-week high of $230.55. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $194.91 and $203.53, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
Image Source: Zacks Investment Research
AIZ’s Growth Projection Encourages
The Zacks Consensus Estimate for Assurant’s 2025 earnings per share indicates a year-over-year increase of 2.2%. The consensus estimate for revenues is pegged at $12.55 billion, implying a year-over-year improvement of 5%.
The consensus estimate for 2026 earnings per share and revenues indicates an increase of 16% and 4.6%, respectively, from the corresponding 2025 estimates.
Earnings have grown 16.6% in the past five years, better than the industry average of 9.8%. Assurant has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
Optimistic Analyst Sentiment for AIZ
Three of the five analysts covering the stock have raised estimates for both 2025 and 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 earnings has moved north 3.9% and 1.6% in the past 30 days, respectively.
Image Source: Zacks Investment Research
Average Target Price for AIZ Suggests Upside
Based on short-term price targets offered by six analysts, the Zacks average price target is $237.33 per share. The average suggests a potential 11.4% upside from the last closing price.
Image Source: Zacks Investment Research
Assurant’s Favorable Return on Capital
Return on equity in the trailing 12 months was 16.4%, better than the industry average of 14.6%. This highlights the company’s efficiency in utilizing shareholders’ funds.
Also, the return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting AIZ’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 10.7%, better than the industry average of 1.92%.
Key Points to Note for AIZ
Assurant’s focus on growing fee-based capital-light businesses, which account for 52% of segmental revenues, bodes well for growth. Management estimates that the contribution from the same will continue to grow in double digits over the long term.
Within Connected Living, AIZ continues to support long-term growth through the development of innovative offerings for partners. U.S. Connected Living is poised for solid growth, particularly within the mobile protection business, riding on innovative offerings, customer experience expertise and improved relationships with mobile carriers and cable operators.
Homeowners’ top-line growth, more favorable loss experience from prior-period development on claims, growth in policies in-force and higher average premiums within lender-placed, as well as growth across various specialty products, should drive better results at Global Housing. For 2025, AIZ expects Global Housing adjusted EBITDA, excluding reportable catastrophes, to deliver strong growth.
Global Lifestyle growth is expected to be driven by Connected Living from growth in global mobile device protection and a new financial services program, inorganic and organic growth strategies. For 2025, Assurant expects adjusted EBITDA in this segment to increase from growth in Connected Living and Global Automotive.
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.
Wealth Distribution
Assurant has a solid capital management policy. It expects to deploy capital to fund investments, mergers and acquisitions. In November 2024, the board approved a dividend hike of 11%, which is the 20th consecutive year of increase. In the first quarter of 2025, Assurant repurchased shares for $62 million. As of now, $287 million remains under the current repurchase authorization. From a share repurchase perspective, Assurant’s expected range for 2025 is between $200 million and $300 million, subject to M&A as well as market and other conditions. For the remainder of 2025, AIZ continues to expect that share repurchases will remain more balanced due to the ability of its businesses to generate significant cash flow. The ultimate level of repurchases will depend on M&A opportunities and other market conditions.
Conclusion
Focus on capital-light businesses, Homeowners growth, and Connected Living growth within the mobile protection business should favor Assurant’s results. Higher return on capital, as well as favorable growth estimates and attractive valuations, should continue to benefit the insurer over the long term.
Assurant also has a VGM Score of B. Stocks with a favorable VGM Score are those with the most attractive value, best growth and most promising momentum compared with peers. Its impressive dividend history as well as attractive valuations are other positives.
Coupled with the impressive dividend history, solid growth projections, as well as optimistic analyst sentiment, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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AIZ Rallies 12.5% in a Year: Time to Buy the Stock for Solid Returns?
Key Takeaways
Assurant, Inc. (AIZ - Free Report) shares have risen 12.5% in the past year compared with the industry's growth of 9.2%. The Finance sector and the Zacks S&P 500 index have returned 16.7% and 15.8%, respectively, in the said time frame.
With a market capitalization of $10.72 billion, the average volume of shares traded in the last three months was 0.5 million.
Image Source: Zacks Investment Research
AIZ Shares are Affordable
Assurant shares are trading at a discount compared with the multi-line insurance industry. Its forward price-to-earnings multiple of 1.97X is lower than the industry average of 2.19X, the Finance sector’s 4.03X and the Zacks S&P 500 Composite’s 8.37X. The insurer has a Value Score of A.
Shares of Enact Holdings, Inc. (ACT - Free Report) , MGIC Investment Corporation (MTG - Free Report) and Radian Group Inc. (RDN - Free Report) are also trading at a discount to the industry average.
Image Source: Zacks Investment Research
AIZ Trading Above 50-Day and 200-Day Moving Averages
Shares of Assurant closed at $212.50 on Aug. 15, near its 52-week high of $230.55. This proximity underscores investor confidence. It has the ingredients for further price appreciation. The stock is trading above the 50-day and 200-day simple moving averages (SMA) of $194.91 and $203.53, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.
Image Source: Zacks Investment Research
AIZ’s Growth Projection Encourages
The Zacks Consensus Estimate for Assurant’s 2025 earnings per share indicates a year-over-year increase of 2.2%. The consensus estimate for revenues is pegged at $12.55 billion, implying a year-over-year improvement of 5%.
The consensus estimate for 2026 earnings per share and revenues indicates an increase of 16% and 4.6%, respectively, from the corresponding 2025 estimates.
Earnings have grown 16.6% in the past five years, better than the industry average of 9.8%. Assurant has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
Optimistic Analyst Sentiment for AIZ
Three of the five analysts covering the stock have raised estimates for both 2025 and 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 earnings has moved north 3.9% and 1.6% in the past 30 days, respectively.
Image Source: Zacks Investment Research
Average Target Price for AIZ Suggests Upside
Based on short-term price targets offered by six analysts, the Zacks average price target is $237.33 per share. The average suggests a potential 11.4% upside from the last closing price.
Image Source: Zacks Investment Research
Assurant’s Favorable Return on Capital
Return on equity in the trailing 12 months was 16.4%, better than the industry average of 14.6%. This highlights the company’s efficiency in utilizing shareholders’ funds.
Also, the return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting AIZ’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 10.7%, better than the industry average of 1.92%.
Key Points to Note for AIZ
Assurant’s focus on growing fee-based capital-light businesses, which account for 52% of segmental revenues, bodes well for growth. Management estimates that the contribution from the same will continue to grow in double digits over the long term.
Within Connected Living, AIZ continues to support long-term growth through the development of innovative offerings for partners. U.S. Connected Living is poised for solid growth, particularly within the mobile protection business, riding on innovative offerings, customer experience expertise and improved relationships with mobile carriers and cable operators.
Homeowners’ top-line growth, more favorable loss experience from prior-period development on claims, growth in policies in-force and higher average premiums within lender-placed, as well as growth across various specialty products, should drive better results at Global Housing. For 2025, AIZ expects Global Housing adjusted EBITDA, excluding reportable catastrophes, to deliver strong growth.
Global Lifestyle growth is expected to be driven by Connected Living from growth in global mobile device protection and a new financial services program, inorganic and organic growth strategies. For 2025, Assurant expects adjusted EBITDA in this segment to increase from growth in Connected Living and Global Automotive.
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.
Wealth Distribution
Assurant has a solid capital management policy. It expects to deploy capital to fund investments, mergers and acquisitions. In November 2024, the board approved a dividend hike of 11%, which is the 20th consecutive year of increase. In the first quarter of 2025, Assurant repurchased shares for $62 million. As of now, $287 million remains under the current repurchase authorization. From a share repurchase perspective, Assurant’s expected range for 2025 is between $200 million and $300 million, subject to M&A as well as market and other conditions. For the remainder of 2025, AIZ continues to expect that share repurchases will remain more balanced due to the ability of its businesses to generate significant cash flow. The ultimate level of repurchases will depend on M&A opportunities and other market conditions.
Conclusion
Focus on capital-light businesses, Homeowners growth, and Connected Living growth within the mobile protection business should favor Assurant’s results. Higher return on capital, as well as favorable growth estimates and attractive valuations, should continue to benefit the insurer over the long term.
Assurant also has a VGM Score of B. Stocks with a favorable VGM Score are those with the most attractive value, best growth and most promising momentum compared with peers. Its impressive dividend history as well as attractive valuations are other positives.
Coupled with the impressive dividend history, solid growth projections, as well as optimistic analyst sentiment, the time appears right for potential investors to bet on this Zacks Rank #2 (Buy) insurer. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.