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W.R. Berkley Up 36% Year to Date: What's Aiding the Stock?

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W.R. Berkley (WRB - Free Report) shares have gained 35.7% year to date, outperforming the industry's rise of 4.6% and the Zacks S&P 500 composite’s increase of 16.4%. With market capitalization of $12.2 billion, average volume of shares traded in the last three months was 0.5 million. In fact, shares of the company hit a new 52-week high of $67.46 in the last trading session.



What’s Behind the Upside?

W.R. Berkley’s return on equity is 10.2%, better than the industry average of 7.1%. This reflects the company’s prudent usage of its shareholders’ funds.

The company also rewards its shareholders with dividend hike and special dividend, reflecting effective capital deployment. The recent 10% hike in dividend and 50 cents in special dividend mark the 14th consecutive dividend increase and 10th special dividend. Its dividend yield of nearly 0.7% betters the industry average of 0.4%, making it an attractive pick for yield-seeking investors.

W.R. Berkley delivered positive earnings surprise in the last seven quarters, reflecting operational excellence.

Will the Rally Continue?

W.R. Berkley should continue to benefit from increasing contribution from insurance business. Several new startups in varied business lines including healthcare, cyber security, energy and agriculture, and growing international markets, including the Asia-Pacific region, South America and Mexico provide diversification benefits. With pricing firming up in most business lines, it should lead to revenue growth.

The company’s international business should continue to contribute steadily to its results. Premium growth in the international unit is mainly supported by the emerging markets of United Kingdom, Continental Europe, South America, Canada, Scandinavia, Asia and Australia.

W.R. Berkley has a strong capital position with sufficient cash generation capabilities that help it deploy capital effectively and pursue growth initiatives.

W.R. Berkley sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for 2019 has been revised up by a cent in the past 60 days. The long-term expected earnings growth rate is currently pegged at 9%.

Other Stocks to Consider

Some other top-ranked property and casualty insurance stocks are Alleghany Corporation , Argo Group International Holdings, Ltd. and CNA Financial Corporation (CNA - Free Report) . .

Alleghany provides property and casualty reinsurance and insurance products in the United States and internationally. The stock sports a Zacks Rank #1. The company delivered positive surprise of 32.51% in the last reported quarter.

Argo Group underwrites specialty insurance and reinsurance products in the property and casualty markets. The stock sports Zacks Rank #1. The company delivered positive surprise of 34.09% in the last reported quarter.

CNA Financial provides commercial property and casualty insurance products primarily in the United States. The stock carries a Zacks Rank #2 (Buy).  The company delivered positive surprise of 12.50% in the last reported quarter.

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