Back to top

Image: Bigstock

Here's Why Hold Strategy is Apt for AXIS Capital (AXS) Now

Read MoreHide Full Article

AXIS Capital Holdings (AXS - Free Report) remains well poised for growth given its continued premium growth, improved pricing, growth strategies and effective capital deployment.

Estimates for AXIS Capital have been revised upward over the past 60 days, reflecting analysts’ confidence in the stock. The Zacks Consensus Estimate for 2019 earnings per share has moved nearly 5% north while that for 2020 has moved up 0.2% in the said time frame.

Shares of AXIS Capital have rallied 24% year to date, outperforming the industry’s increase of 7.8%.

The Zacks Rank #3 (Hold) property and casualty insurer has been witnessing sustained premium growth attributable to new business opportunities, expanded footprint, better performances at Lloyds syndicate, expanded capabilities at AXIS Ventures and strength at its accident & health (A&H) business. We expect the company’s continuous focus on building its Specialty Insurance and Reinsurance business to help it retain the growth momentum.

AXIS Capital is continuously evaluating opportunities to optimize portfolio, lower volatility, reduce exposure to less profitable business and grow in attractive lines and markets. The company has also made investments in A&H, renewable energy, cyber, agriculture reinsurance and mortgage reinsurance.

The company remains focused on improving portfolio mix, ramping up underwriting profitability and strengthening casualty and professional lines in the insurance segment, particularly motor and reinsurance.

AXIS Capital has a solid capital management policy in place with regular dividend hikes and share buybacks. The company made 14 consecutive dividend raises, riding on its sturdy earnings. Its dividend currently yields 2.5%, better than the industry average of 0.4%, making it an attractive pick for yield-seeking investors.

The Zacks Consensus Estimate for 2019 and 2020 earnings per share is pegged at $5.06 and $5.27, indicating year-over-year increase of 163.4% and 4.2%, respectively. The expected long-term earnings growth rate is pegged at 8.5%.

Stocks to Consider

Some better-ranked property and casualty insurance stocks are Palomar Holdings (PLMR - Free Report) , Hallmark Financial Services, (HALL - Free Report) and Donegal Group (DGICA - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Palomar Holdings provides personal and commercial specialty property insurance products. The company delivered an average four-quarter positive surprise of 25%.

Hallmark Financial Services operates through three segments and underwrites, markets, distributes and services property and casualty insurance products in the United States. Its insurance products are marketed through general agents and specialty brokers. The company came up with an average four-quarter positive surprise of 97.5%.

Donegal Group is an insurance holding company, which provides personal and commercial lines of property and casualty insurance to individuals and operates through four segments. It pulled off a four-quarter average beat of 181.67%.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”

Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.6% per year. So be sure to give these hand-picked 7 your immediate attention.

See them now >>