On May 21, Zacks Investment Research upgraded Homeowners Choice, Inc. (HCI - Free Report) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Homeowners Choice witnessed rising earnings estimates on the back of strong first-quarter 2013 results. Moreover, this property and casualty insurer delivered positive earnings surprises in the last 4 quarters with an average beat of 40.2%.
Homeowners Choice reported first-quarter results on May 2. Non-GAAP earnings per share came in at $1.81, surpassing the Zacks Consensus Estimate of $1.09 by 66.1% and year-ago earnings of 88 cents by 105.7%.
Earnings were primarily aided by solid growth in top line and a 5.4% decrease in total expense.
Top line improved 48.4% year over year and exceeded the Zacks Consensus Estimate by 47.6%.
Policies assumed from Citizens Property Insurance Corporation in Nov 2012 aided a substantial improvement in gross premiums written.
Loss ratio improved to 26.2% from 47.4% in the year-ago quarter.
Homeowners Choice also boasts a dividend yield of 2.68%, comparing favorably with the industry average of 2.01%.
The Zacks Consensus Estimate for 2013 increased 32.9% to $4.12 per share as 1 of 2 estimates was revised higher over the last 30 days. It also represents a year-over-year improvement of 26.3%. The Zacks Consensus Estimate for 2014 is currently pegged at $3.55.
Other Stocks to Consider
Apart from Homeowners Choice, other stocks that are outperforming in the property and casualty industry include AXIS Capital Holdings Ltd. (AXS - Free Report) , Platinum Underwriters Holdings Ltd. and Montpelier Re Holdings Ltd. . All these stocks carry a Zacks Rank #1 (Strong Buy).