NMIH Holdings, Inc. (NMIH - Free Report) has been witnessing substantial premium growth, courtesy of a favorable performance displayed by new insurance written (NIW). Given the rising trend of NIW across the company’s product line and its compelling portfolio mix, we expect this momentum to continue going forward.
The company has a favorable Growth Score of B. This style score analyzes the growth prospects of a company. Back-tested results show that stocks with an impressive Value Score of A or B coupled with a solid Zacks Rank #1 (Strong Buy) and 2 (Buy) offer the best investment opportunity.
Higher money rates along with enhanced yields and an increasing size of the total investment portfolio should continue to drive improved investment results.
Riding on better investment results and higher premiums, the company has been experiencing robust revenues and the momentum is expected to continue in the near term as well. We expect this top-line improvement to further accelerate the company’s overall growth.
Going forward, the P&C insurer anticipates delivering numbers in strong mid-teens and is well-positioned to achieve its growth-driving objectives.
Further, with the introduction of Rate GPS (Granular Pricing System), which represents an important evolution in pricing approach and risk-selection capabilities, the company aims at making substantial enhancements in the pricing process. We can expect this progress in pricing process to get reflected in the insurer’s overall results.
Solid market conditions and a growing in-force portfolio have allowed the company to maintain its underwriting profitability and we expect this metric to deliver a favorable performance in the upcoming quarters as well.
The company has been able to sustain a strong liquidity position, which in turn, has helped it fund strategic initiatives and oversee its execution process, thereby boosting the product pricing, risk management and technology capabilities.
The consensus mark for current-year earnings per share is pegged at $2.21, representing a year-over-year surge of 33.1% on 32.6% rise in revenues of $364.8 million.
Also, the company pulled off a positive surprise in all the last four reported quarters, the average being 15.39%.
Zacks Rank and Share Price Movement
NMIH Holdings holds a Zacks Rank #2 (Buy). Shares of the company have rallied 35.3% year to date, outperforming the S&P 500 index’s gain of 11.1%. We believe, the aforementioned upsides will push the stock up in the near term.
Other Stocks to Consider
Investors interested in other top-ranked stocks from the insurance industry can also consider Arch Capital Group Ltd. (ACGL - Free Report) , Cincinnati Financial Corporation (CINF - Free Report) and Berkshire Hathaway Inc. (BRK.B - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital Group provides property, casualty and mortgage insurance and reinsurance products worldwide. The company delivered positive surprises in all the last four reported quarters, the average being 14.72%.
Cincinnati Financial provides property and casualty insurance products in the United States. The company pulled off positive surprises in three of the trailing four reported quarters, the average earnings surprise being 18.08%.
Berkshire Hathaway provides property and casualty insurance and reinsurance plus life, accident and health reinsurance besides operating railroad systems in North America. The company came up with positive surprises in three of the preceding four reported quarters, the average beat being 4.31%.
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