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Why Is Assurant (AIZ) Up 9% Since Last Earnings Report?
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It has been about a month since the last earnings report for Assurant (AIZ - Free Report) . Shares have added about 9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Assurant due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Assurant Q2 Earnings Beat Estimates, Revenues Up Y/Y
Assurant reported second-quarter 2021 net operating income of $2.99 per share, which outpaced the Zacks Consensus Estimate by 20.1%. The bottom line improved 19.6% year over year.
The company’s results gained on the back of higher revenues, reduced catastrophe losses, strong contributions by Global Lifestyle as well as Global Housing segments, and decline in net operating loss across Corporate and Other segment. However, the upside was partly offset by escalating costs.
Total revenues of $2.5 billion rose 3.6% year over year, courtesy of rise in net earned premiums, fees and other income and net investment income. The top line surpassed the consensus mark by 6.4%.
Net investment income climbed 26.8% year over year to $82.9 million in the quarter under review.
Total benefits, losses and expenses of $2.3 billion increased 7.6% year over year primarily due to rise in selling, underwriting, general and administrative expenses, and policyholder benefits.
Segmental Performances
Revenues at Global Lifestyle advanced 10% year over year to $1.9 billion, on account of solid contributions made by Global Automotive and Connected Living businesses. Global Automotive was driven by robust U.S. sales coupled with benefits stemming from recent buyouts. Meanwhile, expansion of service contracts and mobile trade-in fetching improved fee income benefited the Connected Living unit.
Net operating income rose 2% year over year to $123.8 million on the back of organic growth across Global Automotive, improved investment income and enhanced claims experience in Global Financial Services.
Revenues at Global Housing of $511.1 million improved 5% year over year in the quarter under review. The uptick came on the back of well-performing Multifamily Housing and lender-placed riding on increased higher premium rates and average insured values. However, the rise has been partly offset by decline in real estate owned volumes.
Net operating income grew 10% year over year to $93.7 million attributable to reduced catastrophes losses.
Net operating loss at Corporate & Other of $11.5 million was narrower than the prior-year quarter’s loss of $28.8 million.
Financial Update
The company exited the second quarter with liquidity of $353 million, which remains $128 million higher than the company’s current targeted minimum level of $225 million.
Total assets came in at $46 billion as of Jun 30, 2021, up 3% from the figure at 2020 end.
Total shareholders’ equity was $5.9 billion, which decreased 0.7% year over year.
Share Repurchase and Dividend Update
The company bought back 1.2 million shares worth $191 million in the second quarter. Over Jul 1-Jul 30 period, the company bought back additional 0.74 million shares for around $115 million. Presently, it has $1.3 billion left under its share buyback program.
The company’s total common stock dividends amounted to $42 million in the quarter under review.
2021 Guidance
Assurant continues to anticipate net operating income, excluding reportable catastrophes, per diluted share, to register 10% to 14% approximate growth from the 2020’s figure of $9.88. However, net operating income, excluding reportable catastrophes, is anticipated to be lesser in the second half of 2021 when compared to the first half of the year due to higher investments undertaken to drive growth across its connected world businesses and reduced investment income.
Management reiterated that strength in Global Lifestyle, decline in Corporate loss and share buybacks are expected to provide a boost to 2021 results.
The company expects that adjusted EBITDA, excluding reportable catastrophes is likely to increase at the same rate as that of net operating income, excluding reportable catastrophes. Global Lifestyle segment is anticipated to witness double-digit adjusted EBITDA growth
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -10.39% due to these changes.
VGM Scores
At this time, Assurant has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Assurant has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Assurant (AIZ) Up 9% Since Last Earnings Report?
It has been about a month since the last earnings report for Assurant (AIZ - Free Report) . Shares have added about 9% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Assurant due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Assurant Q2 Earnings Beat Estimates, Revenues Up Y/Y
Assurant reported second-quarter 2021 net operating income of $2.99 per share, which outpaced the Zacks Consensus Estimate by 20.1%. The bottom line improved 19.6% year over year.
The company’s results gained on the back of higher revenues, reduced catastrophe losses, strong contributions by Global Lifestyle as well as Global Housing segments, and decline in net operating loss across Corporate and Other segment. However, the upside was partly offset by escalating costs.
Total revenues of $2.5 billion rose 3.6% year over year, courtesy of rise in net earned premiums, fees and other income and net investment income. The top line surpassed the consensus mark by 6.4%.
Net investment income climbed 26.8% year over year to $82.9 million in the quarter under review.
Total benefits, losses and expenses of $2.3 billion increased 7.6% year over year primarily due to rise in selling, underwriting, general and administrative expenses, and policyholder benefits.
Segmental Performances
Revenues at Global Lifestyle advanced 10% year over year to $1.9 billion, on account of solid contributions made by Global Automotive and Connected Living businesses. Global Automotive was driven by robust U.S. sales coupled with benefits stemming from recent buyouts. Meanwhile, expansion of service contracts and mobile trade-in fetching improved fee income benefited the Connected Living unit.
Net operating income rose 2% year over year to $123.8 million on the back of organic growth across Global Automotive, improved investment income and enhanced claims experience in Global Financial Services.
Revenues at Global Housing of $511.1 million improved 5% year over year in the quarter under review. The uptick came on the back of well-performing Multifamily Housing and lender-placed riding on increased higher premium rates and average insured values. However, the rise has been partly offset by decline in real estate owned volumes.
Net operating income grew 10% year over year to $93.7 million attributable to reduced catastrophes losses.
Net operating loss at Corporate & Other of $11.5 million was narrower than the prior-year quarter’s loss of $28.8 million.
Financial Update
The company exited the second quarter with liquidity of $353 million, which remains $128 million higher than the company’s current targeted minimum level of $225 million.
Total assets came in at $46 billion as of Jun 30, 2021, up 3% from the figure at 2020 end.
Total shareholders’ equity was $5.9 billion, which decreased 0.7% year over year.
Share Repurchase and Dividend Update
The company bought back 1.2 million shares worth $191 million in the second quarter. Over Jul 1-Jul 30 period, the company bought back additional 0.74 million shares for around $115 million. Presently, it has $1.3 billion left under its share buyback program.
The company’s total common stock dividends amounted to $42 million in the quarter under review.
2021 Guidance
Assurant continues to anticipate net operating income, excluding reportable catastrophes, per diluted share, to register 10% to 14% approximate growth from the 2020’s figure of $9.88. However, net operating income, excluding reportable catastrophes, is anticipated to be lesser in the second half of 2021 when compared to the first half of the year due to higher investments undertaken to drive growth across its connected world businesses and reduced investment income.
Management reiterated that strength in Global Lifestyle, decline in Corporate loss and share buybacks are expected to provide a boost to 2021 results.
The company expects that adjusted EBITDA, excluding reportable catastrophes is likely to increase at the same rate as that of net operating income, excluding reportable catastrophes. Global Lifestyle segment is anticipated to witness double-digit adjusted EBITDA growth
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -10.39% due to these changes.
VGM Scores
At this time, Assurant has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Assurant has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.