Chubb Limited (CB - Free Report) is well poised for growth, given its strong portfolio of products and services, strategic acquisitions, presence in global market and efficient capital deployment.
Chubb boasts a strong portfolio of products and services that in turn leads to improvement in premium growth. Further, strategic acquisitions have paved the way for international and domestic expansions, apart from supporting competitive edge in terms of scale, efficiencies and balance sheet size.
As part of the strategic initiatives, Chubb invests in cyber insurance and capitalizes on opportunities in domestic and international middle market business with its core package as well as specialty products. Its accident and health (A&H) and the personal lines businesses are also well poised for growth. The U.S. small commercial business has also gained traction. Also, Chubb’s other distribution agreements aid in enhancing its market presence and expanding its network.
This property and casualty insurer effectively deploys capital via share buyback and dividend payouts to enhance shareholders value. In May 2019, the company hiked its dividend by 2.5%, which marks the 26th straight dividend hike. Chubb’s dividend yield of 1.9% betters the industry average of 0.4%, making it an attractive pick for yield-seeking investors.
Chubb carries a Zacks Rank #2 (Buy) and has a VGM Score of B. VGM Score helps to identify stocks with the most attractive value, best growth and the most promising momentum.
The stock also carries a favorable Value Score of B. Back-tested results show that stocks with Value Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 are best investment options.
Shares of Chubb have rallied 22.3% in a year's time, outperforming the industry’s growth of 15.5%.
Chubb’s return on equity was 8.6% in the trailing 12-month period, higher than the industry average of 6.9%. Return on equity is a profitability measure that identifies a company’s efficiency in utilizing its shareholders’ funds.
The company has a decent earnings surprise history. It beat estimates in each of the trailing four quarters, with the average being 2.43%.
The Zacks Consensus Estimate for 2019 and 2020 earnings per share is pegged at $10.34 and $11.00, indicating increase of nearly 9.5% and 6.4%, respectively from the year-ago reported figure. The expected long-term earnings growth rate is 10%.
Other Stocks to Consider
Some other top-ranked stocks from the insurance industry include Hallmark Financial Services (HALL - Free Report) , Palomar Holdings (PLMR - Free Report) , and RenaissanceRe Holdings (RNR - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hallmark Financial underwrites markets, distributes and services property and casualty insurance products in the United States. The company came up with average four-quarter positive surprise of 95.27%.
Palomar Holdings provides personal and commercial specialty property insurance products. The company beat earnings estimates in two of the last four reported quarters, the average being 15.85%.
RenaissanceRe Holdings provides insurance and reinsurance products in the United States and Internationally. The company beat earnings estimates in three of the last four reported quarters, the average being 23.27%.
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