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Here's Why Should You Add Chubb (CB) Stock to Your Portfolio
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Chubb Limited (CB - Free Report) is worth adding to one’s portfolio, courtesy of a compelling portfolio, strong renewal retention, positive rate increases, strategic initiatives to fuel profitability and solid capital position as well as an optimistic growth projection.
Being one of the world’s largest providers of property and casualty (P&C) insurance and reinsurance, and the largest publicly traded P&C insurer based on market capitalization, Chubb has a decent history of delivering positive surprises in the last six reported quarters.
CB has a VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
Zacks Rank & Price Performance
CB currently carries a Zacks Rank #2 (Buy). In a year, the stock has gained 5.7% against the industry’s decline of 2.6%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for Chubb’s 2022 earnings is pegged at $15.46, indicating an increase of 23.09% on 3.8% higher revenues of $43.5 billion. The consensus estimate for 2023 earnings is pegged at $17.13, indicating an increase of 10.8% on 9% higher revenues of $47.4 billion.
The long-term earnings growth rate is currently pegged at 10%. It has a Growth Score of B.
Growth Drivers
Solid commercial businesses, commercial P&C rate increases, improving underwriting margins, new business and strong renewal retention should aid premium improvement. The U.S. small commercial business has gained momentum and the company expects this business to have an annual run rate of premium that can be in the multi-billion-dollar range in the next three to five years. Capitalizing on the potential of middle-market businesses, both domestic and international, along with the traditional core package as well as specialty products, bodes well for growth.
Chubb expects continued growth and margin improvement in 2022 as it capitalizes on favorable underwriting conditions for commercial P&C businesses globally.
In its efforts to expand its presence in the Asia-Pacific region, Chubb inked a deal to buy the life and non-life insurance companies of Cigna Corporation in seven Asia-Pacific markets. The addition of Cigna’s business will boost Chubb’s A&H business as well as expand its Asia-based life insurance presence. Upon closing, Chubb’s Asia-Pacific portfolio will increase to $7 billion in premiums from $4 billion at present. Chubb expects to realize in excess of $80 million of expense savings with one-time integration costs of about $100 million. Also, the insurer agreed to purchase an additional ownership interest in Huatai Group in China.
With an improving rate environment, a solid investment portfolio and positive operating cash flow, investment income should rise. Chubb estimates investment income in the range of $980 million to $1 billion in the third quarter of 2022.
Impressive Dividend History
Chubb has a strong capital position with sufficient cash-generation capabilities. This has helped the insurer increase dividends for the last 29 years. The dividend yield is 1.6%, better than the industry average of 0.3%. CB has $2.2 billion remaining under its share buyback authorization.
Value Score
CB has a Value Score of A. Back-tested results have shown that stocks with a Value Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2 offer better returns.
Other Stocks to Consider
Some better-ranked stocks from the insurance industry are Berkshire Hathaway (BRK.B - Free Report) , MGIC Investment (MTG - Free Report) and Brighthouse Financial (BHF - Free Report) .
The Zacks Consensus Estimate for Berkshire Hathaway’s 2022 and 2023 earnings implies 16.7% and 4.2% year-over-year growth, respectively. The average four-quarter surprise is 17.55%. BRK.B sports Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BRK.B’s 2022 and 2023 earnings has moved 2% and 0.4% north, respectively, in the past 60 days. Year to date, shares of BRK.B have lost 7.4%.
The Zacks Consensus Estimate for MTG’s 2022 earnings implies 33.5% year-over-year growth. MGIC Investment’s earnings surpassed estimates in three of the last four quarters, the average earnings surprise being 22.25%.
The Zacks Consensus Estimate for MTG’s 2022 earnings has moved 1 cent north in the past seven days. Year to date, shares of MTG have lost 11.5%.
The Zacks Consensus Estimate for Brighthouse Financial’s 2022 and 2023 earnings has moved 17.3% and 3.6% north in the past 60 days, respectively. Year to date, shares of BHF have lost 3.8%.
The Zacks Consensus Estimate for BHF’s 2023 earnings implies 20.1% year-over-year growth. The average four-quarter surprise is 42.34%.
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Here's Why Should You Add Chubb (CB) Stock to Your Portfolio
Chubb Limited (CB - Free Report) is worth adding to one’s portfolio, courtesy of a compelling portfolio, strong renewal retention, positive rate increases, strategic initiatives to fuel profitability and solid capital position as well as an optimistic growth projection.
Being one of the world’s largest providers of property and casualty (P&C) insurance and reinsurance, and the largest publicly traded P&C insurer based on market capitalization, Chubb has a decent history of delivering positive surprises in the last six reported quarters.
CB has a VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
Zacks Rank & Price Performance
CB currently carries a Zacks Rank #2 (Buy). In a year, the stock has gained 5.7% against the industry’s decline of 2.6%.
Image Source: Zacks Investment Research
Optimistic Growth Projections
The Zacks Consensus Estimate for Chubb’s 2022 earnings is pegged at $15.46, indicating an increase of 23.09% on 3.8% higher revenues of $43.5 billion. The consensus estimate for 2023 earnings is pegged at $17.13, indicating an increase of 10.8% on 9% higher revenues of $47.4 billion.
The long-term earnings growth rate is currently pegged at 10%. It has a Growth Score of B.
Growth Drivers
Solid commercial businesses, commercial P&C rate increases, improving underwriting margins, new business and strong renewal retention should aid premium improvement. The U.S. small commercial business has gained momentum and the company expects this business to have an annual run rate of premium that can be in the multi-billion-dollar range in the next three to five years. Capitalizing on the potential of middle-market businesses, both domestic and international, along with the traditional core package as well as specialty products, bodes well for growth.
Chubb expects continued growth and margin improvement in 2022 as it capitalizes on favorable underwriting conditions for commercial P&C businesses globally.
In its efforts to expand its presence in the Asia-Pacific region, Chubb inked a deal to buy the life and non-life insurance companies of Cigna Corporation in seven Asia-Pacific markets. The addition of Cigna’s business will boost Chubb’s A&H business as well as expand its Asia-based life insurance presence. Upon closing, Chubb’s Asia-Pacific portfolio will increase to $7 billion in premiums from $4 billion at present. Chubb expects to realize in excess of $80 million of expense savings with one-time integration costs of about $100 million. Also, the insurer agreed to purchase an additional ownership interest in Huatai Group in China.
With an improving rate environment, a solid investment portfolio and positive operating cash flow, investment income should rise. Chubb estimates investment income in the range of $980 million to $1 billion in the third quarter of 2022.
Impressive Dividend History
Chubb has a strong capital position with sufficient cash-generation capabilities. This has helped the insurer increase dividends for the last 29 years. The dividend yield is 1.6%, better than the industry average of 0.3%. CB has $2.2 billion remaining under its share buyback authorization.
Value Score
CB has a Value Score of A. Back-tested results have shown that stocks with a Value Score of A or B combined with a Zacks Rank #1 (Strong Buy) or #2 offer better returns.
Other Stocks to Consider
Some better-ranked stocks from the insurance industry are Berkshire Hathaway (BRK.B - Free Report) , MGIC Investment (MTG - Free Report) and Brighthouse Financial (BHF - Free Report) .
The Zacks Consensus Estimate for Berkshire Hathaway’s 2022 and 2023 earnings implies 16.7% and 4.2% year-over-year growth, respectively. The average four-quarter surprise is 17.55%. BRK.B sports Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for BRK.B’s 2022 and 2023 earnings has moved 2% and 0.4% north, respectively, in the past 60 days. Year to date, shares of BRK.B have lost 7.4%.
The Zacks Consensus Estimate for MTG’s 2022 earnings implies 33.5% year-over-year growth. MGIC Investment’s earnings surpassed estimates in three of the last four quarters, the average earnings surprise being 22.25%.
The Zacks Consensus Estimate for MTG’s 2022 earnings has moved 1 cent north in the past seven days. Year to date, shares of MTG have lost 11.5%.
The Zacks Consensus Estimate for Brighthouse Financial’s 2022 and 2023 earnings has moved 17.3% and 3.6% north in the past 60 days, respectively. Year to date, shares of BHF have lost 3.8%.
The Zacks Consensus Estimate for BHF’s 2023 earnings implies 20.1% year-over-year growth. The average four-quarter surprise is 42.34%.