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W.R. Berkley (WRB) Up 30.8% in a Year: More Room for Growth?
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Shares of W.R. Berkley (WRB - Free Report) have gained 30.8% in a year, outperforming the industry's increase of 14.1%. The Zacks S&P 500 composite has rallied 12% in the said time frame. With a market capitalization of $15.9 billion, the average volume of shares traded in the last three months was 0.8 million.
Image Source: Zacks Investment Research
The rally was largely driven by strong rate increases, reduced loss ratio and high retention.
This property and casualty insurer has a decent earnings surprise history. The bottom line beat estimates in each of the last four quarters, the average being 27.53%.
Will the Bull Run Continue?
Estimates for 2022 and 2023 have moved up nearly 4.7% and 1.7%, respectively, in the past 30 days, reflecting investors’ optimism.
The Zacks Consensus Estimate for 2022 and 2023 earnings per share is pegged at $5.30 and $5.90, indicating a year-over-year increase of 3.9% and 11.2%, respectively.
W.R. Berkley is well poised to grow on the back of solid performance in the Insurance segment. The Insurance business is likely to gain from higher premiums at other liability, professional liability, short-tail lines, commercial auto and workers' compensation, rate increases, several new startup units in varied business lines, benefits derived from market dislocations and high retention.
In 2021, the insurer’s trailing 12-month return on equity (ROE) was 16.2%, which expanded 750 basis points year over year. ROE reflects its efficiency in using shareholders’ funds.
In 2021, the insurer generated a record underwriting income of $845 million in spite of being exposed to catastrophe losses. The underwriting profitability is likely to benefit from growth in premium rates and exposure as well as reductions in loss ratio.
Growth in net premiums earned continues to improve the expense ratio. For 2022, W.R. Berkley expects an expense ratio in the range of 28% to 29%. In 2021, operating cash flows remained strong with a record level of almost $2.2 billion.
Backed by its operating strength, the property and casualty insurer has a solid track record of increasing dividends for 16 straight years and has paid 13 special dividends since 2012. Its current dividend yield of 0.6% is better than the industry average of 0.3%, which makes WRB stock an attractive pick for yield-seeking investors.
W.R. Berkley currently sports a Zacks Rank #1 (Strong Buy) and has a favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum. Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best opportunities in the value investing space.
The expected long-term earnings growth rate is pegged at 9%. W.R. Berkley has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
The bottom line of Cincinnati Financial surpassed earnings estimates in each of the last four quarters, the average being 38.48%. In the past year, the insurer has rallied 27.6%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.5% north each in the past seven days.
Arch Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 35.84%. In the past year, ACGL has rallied 34%.
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 2.9% and 1.6% north, respectively, in the past 30 days. Arch Capital’s expected long-term earnings growth rate is pegged at 10%.
The bottom line of American Financial surpassed earnings estimates in each of the last four quarters, the average being 39.58%. In the past year, the insurer has rallied 20.9%.
The Zacks Consensus Estimate for American Financial’s 2022 and 2023 earnings has moved 3.3% and 8.2% north, respectively, in the past seven days.
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W.R. Berkley (WRB) Up 30.8% in a Year: More Room for Growth?
Shares of W.R. Berkley (WRB - Free Report) have gained 30.8% in a year, outperforming the industry's increase of 14.1%. The Zacks S&P 500 composite has rallied 12% in the said time frame. With a market capitalization of $15.9 billion, the average volume of shares traded in the last three months was 0.8 million.
Image Source: Zacks Investment Research
The rally was largely driven by strong rate increases, reduced loss ratio and high retention.
This property and casualty insurer has a decent earnings surprise history. The bottom line beat estimates in each of the last four quarters, the average being 27.53%.
Will the Bull Run Continue?
Estimates for 2022 and 2023 have moved up nearly 4.7% and 1.7%, respectively, in the past 30 days, reflecting investors’ optimism.
The Zacks Consensus Estimate for 2022 and 2023 earnings per share is pegged at $5.30 and $5.90, indicating a year-over-year increase of 3.9% and 11.2%, respectively.
W.R. Berkley is well poised to grow on the back of solid performance in the Insurance segment. The Insurance business is likely to gain from higher premiums at other liability, professional liability, short-tail lines, commercial auto and workers' compensation, rate increases, several new startup units in varied business lines, benefits derived from market dislocations and high retention.
In 2021, the insurer’s trailing 12-month return on equity (ROE) was 16.2%, which expanded 750 basis points year over year. ROE reflects its efficiency in using shareholders’ funds.
In 2021, the insurer generated a record underwriting income of $845 million in spite of being exposed to catastrophe losses. The underwriting profitability is likely to benefit from growth in premium rates and exposure as well as reductions in loss ratio.
Growth in net premiums earned continues to improve the expense ratio. For 2022, W.R. Berkley expects an expense ratio in the range of 28% to 29%.
In 2021, operating cash flows remained strong with a record level of almost $2.2 billion.
Backed by its operating strength, the property and casualty insurer has a solid track record of increasing dividends for 16 straight years and has paid 13 special dividends since 2012. Its current dividend yield of 0.6% is better than the industry average of 0.3%, which makes WRB stock an attractive pick for yield-seeking investors.
W.R. Berkley currently sports a Zacks Rank #1 (Strong Buy) and has a favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum. Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best opportunities in the value investing space.
The expected long-term earnings growth rate is pegged at 9%. W.R. Berkley has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company.
Other Stocks to Consider
Some other top-ranked insurers include Cincinnati Financial (CINF - Free Report) , Arch Capital Group (ACGL - Free Report) , and American Financial Group (AFG - Free Report) . While Cincinnati Financial sports a Zacks Rank #1, Arch Capital and American Financial carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Cincinnati Financial surpassed earnings estimates in each of the last four quarters, the average being 38.48%. In the past year, the insurer has rallied 27.6%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.5% north each in the past seven days.
Arch Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 35.84%. In the past year, ACGL has rallied 34%.
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 2.9% and 1.6% north, respectively, in the past 30 days. Arch Capital’s expected long-term earnings growth rate is pegged at 10%.
The bottom line of American Financial surpassed earnings estimates in each of the last four quarters, the average being 39.58%. In the past year, the insurer has rallied 20.9%.
The Zacks Consensus Estimate for American Financial’s 2022 and 2023 earnings has moved 3.3% and 8.2% north, respectively, in the past seven days.