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What's in Store for Assurant (AIZ) This Earnings Season?

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Assurant, Inc. (AIZ - Free Report) is slated to report second-quarter 2019 results on Aug 6, after market close. The company delivered positive earnings surprise in each of the last four reported quarters.

Let’s see how things are shaping up for this announcement.

Assurant is likely to benefit from solid results at Global Lifestyle, Housing and Preneed business lines. The acquisition of The Warranty Group (TWG) is also likely to contribute.

Global Lifestyle is expected to continue to benefit from growth at Connected Living and Global Automotive. The company’s efforts to collaborate with leading brands to bring innovative products and services will provide support.

Global Housing is likely to benefit from expansion of specialty offerings, multifamily housing, in particular realignment of business and implementation of different expense management initiatives across the segment. However, the company estimates higher non-cat loss ratios in the second quarter of 2019. The company expects lender-placed earnings to reflect additional reinsurance coverage that it acquired in early 2019.

Improved interest rate environment and higher invested assets are expected to support investment results.

All these factors combined are likely to drive revenue improvement. The Zacks Consensus estimate for revenues is pegged at $2.3 billion, indicating 28.2% increase from the year-ago reported figure.

However, expenses are likely to increase given higher policyholder benefits, selling, underwriting, general and administrative expenses as well as interest expense.

Continued share buybacks should aid the bottom line.

The Zacks Consensus Estimate for second-quarter earnings per share is pegged at $2.13, implying an increase of nearly 1% from the year-ago reported figure.

What Our Quantitative Model States

Our proven model does not conclusively show that Assurant is likely to beat on earnings in the to-be-reported period. This is because a stock needs to have both a positive Earnings ESP and a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.

Earnings ESP: Assurant has an Earnings ESP of 0.00%. This is because the Most Accurate Estimate as well as the Zacks Consensus Estimate is pegged at $2.13. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Assurant, Inc. Price and EPS Surprise

Assurant, Inc. Price and EPS Surprise

Assurant, Inc. price-eps-surprise | Assurant, Inc. Quote

Zacks Rank: Assurant currently carries a Zacks Rank #3. Though Zacks Rank #1, 2 or 3 increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against Zacks Rank #4 (Sell) or 5 (Strong Sell) stocks going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Some stocks from the insurance industry with the perfect mix of elements to outshine estimates this time around are as follows:

Voya Financial (VOYA - Free Report) is set to report second-quarter earnings on Aug 6. The company has an Earnings ESP of +1.42% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

American Financial Group (AFG - Free Report) has an Earnings ESP of +0.66% and a Zacks Rank of 3. The company is scheduled to release second-quarter earnings on Aug 6.

American International Group (AIG - Free Report) has an Earnings ESP of +0.09% and a Zacks Rank of 2. The company is slated to announce second-quarter earnings on Aug 7.

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