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Here's Why You Should Retain Assurant in Your Portfolio Now
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Assurant, Inc. (AIZ - Free Report) is well-poised to gain from higher mobile trade-in volumes and improved liquidity position.
Notably, the Zacks Consensus Estimate for 2020 and 2021 earnings is pegged at $9.15 and $10.68 per share, indicating animprovement of 7% and 16.7%, respectively, from the year-ago reported figure.
Assurant’s ROE of 10% compares favorably with the industry’s figure of 8.3%. This reflects efficient utilization of shareholders’ funds.
Factors Driving Assurant’s Performance
Robust performance at its Global Lifestyle segmentcontinues to drive the insurer. This segment has been gaining from rising mobile trade-in volumes and continued subscriber growth from recently added protection programs. Further, Assurant has been making every effort to boost this segment through inorganic and organic means. The company’s buyout of American Financial& Automotive Services this May is testament to the same. Assurant had taken several strategic initiatives in that past as well, which have aided the company in enhancing scale of operation and strengthening market presence.
Moreover, the Global Lifestyle segment continues to benefit from an increase in the number of mobile subscribers from new and existing programs. Notably, these programs have offered the company a recurring revenue streamamid the COVID-19 pandemic-inducedfinancial uncertainty.
Another segment of the company – Global Preneed – continues to be a solid performer. This segment, which contains lower mortality risks, has been gaining from continued focus on leveraging the Connected Living platform, launching innovative products and services, and forming strategic alliances. The momentum continuedin first-quarter 2020 with segment performing well courtesy of continued growth in the United States from prefunded funeral policies and prior period sales of the Final Need product. However, Assurant has repealed 2020 outlook due to the market volatility induced by the pandemic.
Furthermore, the company’s improved liquidity position has led to a strong balance sheet. This implies that Assurant has sufficient cash reserves to meet its debt obligations. Also, its total debt to total capital of 29.1% lies below the industry’s average of 30.3%.
By virtue of its robust capital position, Assurantengages in effective capital deployment in the form of share buybacks and dividend payments. Its dividend payouts have witnessed a CAGR of 20.3% in the past five years (2014-2019).
However, shares of this Zacks Rank #3 (Hold) company have lost 2% in a year though narrower than the industry’s decline of 20.3%. Escalating expenses, which are likely to put pressure on margin expansion, remain a concern. Notably, in first-quarter 2020, net margin contracted 20 basis points (bps) sequentially.
The company has a trailing four-quarter positive earnings surprise of 2.64%, on average.
Nevertheless, we believe that the company’s strong fundamentals are likely to drive shares going forward.
MGIC Investment provides a critical component of the country's residential mortgage finance system by protecting mortgage investors from credit losses. It has a trailing four-quarter positive earnings surprise of 13.42%, on average.
Kinsale Capital offers various insurance and reinsurance products in the United States. It has a trailing four-quarter positive earnings surprise of 3.44%, on average.
Palomar provides specialty property insurance products for individuals and businesses. It has a trailing four-quarter positive earnings surprise of 10.93%, on average.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Here's Why You Should Retain Assurant in Your Portfolio Now
Assurant, Inc. (AIZ - Free Report) is well-poised to gain from higher mobile trade-in volumes and improved liquidity position.
Notably, the Zacks Consensus Estimate for 2020 and 2021 earnings is pegged at $9.15 and $10.68 per share, indicating animprovement of 7% and 16.7%, respectively, from the year-ago reported figure.
Assurant’s ROE of 10% compares favorably with the industry’s figure of 8.3%. This reflects efficient utilization of shareholders’ funds.
Factors Driving Assurant’s Performance
Robust performance at its Global Lifestyle segmentcontinues to drive the insurer. This segment has been gaining from rising mobile trade-in volumes and continued subscriber growth from recently added protection programs. Further, Assurant has been making every effort to boost this segment through inorganic and organic means. The company’s buyout of American Financial& Automotive Services this May is testament to the same. Assurant had taken several strategic initiatives in that past as well, which have aided the company in enhancing scale of operation and strengthening market presence.
Moreover, the Global Lifestyle segment continues to benefit from an increase in the number of mobile subscribers from new and existing programs. Notably, these programs have offered the company a recurring revenue streamamid the COVID-19 pandemic-inducedfinancial uncertainty.
Another segment of the company – Global Preneed – continues to be a solid performer. This segment, which contains lower mortality risks, has been gaining from continued focus on leveraging the Connected Living platform, launching innovative products and services, and forming strategic alliances. The momentum continuedin first-quarter 2020 with segment performing well courtesy of continued growth in the United States from prefunded funeral policies and prior period sales of the Final Need product. However, Assurant has repealed 2020 outlook due to the market volatility induced by the pandemic.
Furthermore, the company’s improved liquidity position has led to a strong balance sheet. This implies that Assurant has sufficient cash reserves to meet its debt obligations. Also, its total debt to total capital of 29.1% lies below the industry’s average of 30.3%.
By virtue of its robust capital position, Assurantengages in effective capital deployment in the form of share buybacks and dividend payments. Its dividend payouts have witnessed a CAGR of 20.3% in the past five years (2014-2019).
However, shares of this Zacks Rank #3 (Hold) company have lost 2% in a year though narrower than the industry’s decline of 20.3%. Escalating expenses, which are likely to put pressure on margin expansion, remain a concern. Notably, in first-quarter 2020, net margin contracted 20 basis points (bps) sequentially.
The company has a trailing four-quarter positive earnings surprise of 2.64%, on average.
Nevertheless, we believe that the company’s strong fundamentals are likely to drive shares going forward.
Stocks to Consider
Some better-ranked insurance stocks include MGIC Investment Corporation (MTG - Free Report) , Kinsale Capital Group, Inc. (KNSL - Free Report) and Palomar Holdings Inc. (PLMR - Free Report) . While Kinsale Capital sports a Zacks Rank #1 (Strong Buy), MGIC Investment and Palomar carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
MGIC Investment provides a critical component of the country's residential mortgage finance system by protecting mortgage investors from credit losses. It has a trailing four-quarter positive earnings surprise of 13.42%, on average.
Kinsale Capital offers various insurance and reinsurance products in the United States. It has a trailing four-quarter positive earnings surprise of 3.44%, on average.
Palomar provides specialty property insurance products for individuals and businesses. It has a trailing four-quarter positive earnings surprise of 10.93%, on average.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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