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Here's Why Arch Capital (ACGL) Stock is an Attractive Bet Now
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Arch Capital Group Ltd. (ACGL - Free Report) has been gaining momentum on the back of business opportunities, rate increases, growth in existing accounts and solid capital position.
Growth Projections
The Zacks Consensus Estimate for 2022 and 2023 earnings per share is pegged at $4.51 and $5.15, indicating year-over-year increases of 25.9% and 14.1%, respectively. The expected long-term earnings growth rate is pegged at 10%.
Earnings Surprise History
Arch Capital has a solid earnings surprise history. It beat estimates in each of the last four quarters, the average being 35.84%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 2.9% and 5.7% north, respectively, in the past 60 days. This should instill investors' confidence in the ACGL stock.
Zacks Rank & Price Performance
Arch Capital currently carries a Zacks Rank #2 (Buy). In the past year, the stock has rallied 26.5% compared with the industry’s growth of 23.9%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Arch Capital’s ROE for the trailing 12 months is 11.5%, better than the industry average of 5.9%, reflecting its efficiency in utilizing shareholders’ funds.
Style Score
Arch Capital has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum. Arch Capital has an impressive Value Score of A. Back-tested results show that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best opportunities in the value investing space.
Business Tailwinds
Solid performances across the Insurance and Reinsurance segments of Arch Capital are likely to drive revenues in the days ahead.
Increases in most business lines, rates, business opportunities and existing accounts, along with a lower level of premiums ceded, are expected to drive the performance of the Insurance segment.
Business opportunities, growth in existing accounts in casualty and property, and strong rate increases are expected to drive the performance of the Reinsurance segment.
The Mortgage segment is well-poised for improvement on growth in Australia’s single-premium mortgage insurance due to the acquisition of Westpac Lenders Mortgage Insurance Limited in the third quarter of 2021, as well as higher U.S. primary mortgage insurance monthly and single premium volume.
The leading specialty property, and casualty and mortgage insurer actively pursues acquisitions to expand internationally, enhance capabilities, boost operations and diversify the business. The acquisitions are likely to boost the insurer’s insurance solutions and strengthen its position as the only globally diversified insurer of mortgage credit risk.
The P&C insurer boasts an impressive solvency level. Cash flow from operations is likely to gain from higher premiums.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. In the past year, Kinsale Capital has rallied 41.5%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings has moved 3.8% and 3.5% north, respectively, in the past seven days.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, the UFCS stock has declined 10.1%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 60 days.
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 25.8%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 60 days.
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Here's Why Arch Capital (ACGL) Stock is an Attractive Bet Now
Arch Capital Group Ltd. (ACGL - Free Report) has been gaining momentum on the back of business opportunities, rate increases, growth in existing accounts and solid capital position.
Growth Projections
The Zacks Consensus Estimate for 2022 and 2023 earnings per share is pegged at $4.51 and $5.15, indicating year-over-year increases of 25.9% and 14.1%, respectively. The expected long-term earnings growth rate is pegged at 10%.
Earnings Surprise History
Arch Capital has a solid earnings surprise history. It beat estimates in each of the last four quarters, the average being 35.84%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 2.9% and 5.7% north, respectively, in the past 60 days. This should instill investors' confidence in the ACGL stock.
Zacks Rank & Price Performance
Arch Capital currently carries a Zacks Rank #2 (Buy). In the past year, the stock has rallied 26.5% compared with the industry’s growth of 23.9%.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Arch Capital’s ROE for the trailing 12 months is 11.5%, better than the industry average of 5.9%, reflecting its efficiency in utilizing shareholders’ funds.
Style Score
Arch Capital has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Arch Capital has an impressive Value Score of A. Back-tested results show that stocks with a Style Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best opportunities in the value investing space.
Business Tailwinds
Solid performances across the Insurance and Reinsurance segments of Arch Capital are likely to drive revenues in the days ahead.
Increases in most business lines, rates, business opportunities and existing accounts, along with a lower level of premiums ceded, are expected to drive the performance of the Insurance segment.
Business opportunities, growth in existing accounts in casualty and property, and strong rate increases are expected to drive the performance of the Reinsurance segment.
The Mortgage segment is well-poised for improvement on growth in Australia’s single-premium mortgage insurance due to the acquisition of Westpac Lenders Mortgage Insurance Limited in the third quarter of 2021, as well as higher U.S. primary mortgage insurance monthly and single premium volume.
The leading specialty property, and casualty and mortgage insurer actively pursues acquisitions to expand internationally, enhance capabilities, boost operations and diversify the business. The acquisitions are likely to boost the insurer’s insurance solutions and strengthen its position as the only globally diversified insurer of mortgage credit risk.
The P&C insurer boasts an impressive solvency level. Cash flow from operations is likely to gain from higher premiums.
Other Stocks to Consider
Some other top-ranked insurers are Kinsale Capital Group, Inc. (KNSL - Free Report) , United Fire Group, Inc. (UFCS - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) . Kinsale Capital and United Fire currently sport a Zacks Rank #1, whereas Cincinnati Financial carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinsale Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 32.04%. In the past year, Kinsale Capital has rallied 41.5%.
The Zacks Consensus Estimate for KNSL’s 2022 and 2023 earnings has moved 3.8% and 3.5% north, respectively, in the past seven days.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, the UFCS stock has declined 10.1%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 60 days.
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 25.8%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 60 days.