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Verisk Analytics (VRSK) Up 33.4% YTD: What's Driving It?

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Shares of Verisk Analytics, Inc. VRSK have gained 33.4% on a year-to-date basis.


Let’s delve deeper into the factors which have contributed to the company’s price performance.

Consecutive Revenue Beat

Verisk reported better-than-expected revenues in the first three quarters of 2019. The uptick came on the back of continued strength in the company’s Insurance segment and solid improvement in Energy and Specialized Markets, and Financial Services segments.

Higher Organic Revenue Growth

Verisk continues to witness higher organic revenue growth through a combination of increase in new customers for existing solutions, cross-sale of its existing solutions to existing customers and the sale of new solutions. The company continuously seeks to expand its portfolio by leveraging its deep knowledge and embedded position to develop new, proprietary data sets and predictive analytics by working with its customers to understand their evolving needs. Notably, Verisk has recorded an average organic revenue growth of about 8% in the past 10 years. In the first nine months of 2019, total revenues grew 7.1% on an organic constant-currency basis.

Strategic Acquisitions Bode Well

Acquisitions have also been one of the key growth catalysts for Verisk. It has been continuously acquiring and investing in companies globally to expand its business and geographic footprint.

So far in 2019, Verisk has announced four acquisitions. In December, the company signed a deal to buy FAST to enhance its data and analytics solutions in life insurance and annuities market. In October, the company signed a deal to acquire property condition and history data provider BuildFax to boost its Insurance segment. In August, Verisk inked a deal to buy out Genscape to expand its Wood Mackenzie business line’s existing intelligence in energy data and analytics, and strengthen its research and consultancy across the natural resources sectors. In March, the company inked a deal with an enterprise application software provider to acquire the latter’s Content as a Service business to strengthen its environmental health and safety services and extend its global customer footprint and European operations.

Apart from the aforementioned announcements, the company acquired Keystone Aerial Surveys, Inc. in July 2019 to expand its aerial survey services and Property Pres Wizard, LLC. in August.

Zacks Rank & Stocks to Consider

Currently, Verisk carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are Global Payments GPN, Mastercard (MA - Free Report) and Cardtronics CATM. While Global Payments and Cardtronics sport a Zacks Rank #1 (Strong Buy), Mastercard carries a Zacks Rank #2 (Buy).

Long-term expected EPS (three to five years) growth rate for Global Payments, Mastercard and Cardtronics is 17%, 15.9% and 4%, respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.

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