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Stewart Information (STC) Up as Q4 Earnings, Revenues Rise Y/Y
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Shares of Stewart Information Services Corporation (STC - Free Report) gained 1.6% in the last trading session as its top and bottom line increased year over year in the fourth quarter of 2020.
Operating income per share of $2.09 increased 140.2% year over year.
Fourth-quarter results reflect revenue growth across all lines of business and effective cost management. Residential real estate market remained solid driven by strong purchase and refinance demand as the 30-year mortgage rate remained below 3% in the quarter. Commercial saw strong customer activity by year-end.
Stewart Information Services Corporation Price, Consensus and EPS Surprise
Operating revenues of $737 million increased 44.5% year over year on the back of higher revenues from direct operations, agency operations and ancillary services.
Net investment income, however, decreased 21% to $4.1 million.
Total expense of $652.9 million increased about 29% year over year due to amounts retained by agencies, employee costs, other operating expenses and title losses and related claims.
Opened orders totaled 152.6 million, up 63.7% year over year. Closed orders totaled 126 million, up 64.1% year over year
Segment Results
Title: Operating revenues increased 36% year over year to $690.2 million. The upside was driven by increases in direct title revenues and gross independent agency revenues.
Pretax margin of 13.6% expanded 960 bps year over year.
Ancillary Services and Corporate: Operating revenues increased more than six fold year over year to $38 million, driven by acquisitions, partially offset by lower revenues from capital markets search and home equity valuation services operations.
Pretax loss narrowed to $11 million from $16.5 million incurred in the year-ago quarter.
Financial Update
Stewart Information exited the quarter with cash and cash equivalents of $432.7 million, up 30.9% from 2019 end. Notes and contracts payable were $101.8 million, down 8%.
Stockholders’ equity was $1 billion, up 34.5% from 2019 end.
Cash flow from operations was $275.8 million in 2020, up 65.8% year over year.
Of the insurance industry players that have reported fourth-quarter results so far, The Travelers Companies (TRV - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and Progressive Corporation (PGR - Free Report) beat the Zacks Consensus Estimate for earnings.
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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Stewart Information (STC) Up as Q4 Earnings, Revenues Rise Y/Y
Shares of Stewart Information Services Corporation (STC - Free Report) gained 1.6% in the last trading session as its top and bottom line increased year over year in the fourth quarter of 2020.
Operating income per share of $2.09 increased 140.2% year over year.
Fourth-quarter results reflect revenue growth across all lines of business and effective cost management. Residential real estate market remained solid driven by strong purchase and refinance demand as the 30-year mortgage rate remained below 3% in the quarter. Commercial saw strong customer activity by year-end.
Stewart Information Services Corporation Price, Consensus and EPS Surprise
Stewart Information Services Corporation price-consensus-eps-surprise-chart | Stewart Information Services Corporation Quote
Behind the Headlines
Operating revenues of $737 million increased 44.5% year over year on the back of higher revenues from direct operations, agency operations and ancillary services.
Net investment income, however, decreased 21% to $4.1 million.
Total expense of $652.9 million increased about 29% year over year due to amounts retained by agencies, employee costs, other operating expenses and title losses and related claims.
Opened orders totaled 152.6 million, up 63.7% year over year. Closed orders totaled 126 million, up 64.1% year over year
Segment Results
Title: Operating revenues increased 36% year over year to $690.2 million. The upside was driven by increases in direct title revenues and gross independent agency revenues.
Pretax margin of 13.6% expanded 960 bps year over year.
Ancillary Services and Corporate: Operating revenues increased more than six fold year over year to $38 million, driven by acquisitions, partially offset by lower revenues from capital markets search and home equity valuation services operations.
Pretax loss narrowed to $11 million from $16.5 million incurred in the year-ago quarter.
Financial Update
Stewart Information exited the quarter with cash and cash equivalents of $432.7 million, up 30.9% from 2019 end. Notes and contracts payable were $101.8 million, down 8%.
Stockholders’ equity was $1 billion, up 34.5% from 2019 end.
Cash flow from operations was $275.8 million in 2020, up 65.8% year over year.
Zacks Rank
Stewart Information currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Insurers
Of the insurance industry players that have reported fourth-quarter results so far, The Travelers Companies (TRV - Free Report) , W.R. Berkley Corporation (WRB - Free Report) and Progressive Corporation (PGR - Free Report) beat the Zacks Consensus Estimate for earnings.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>