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Why It's Worth Betting on Kinsale Capital (KNSL) Stock Now
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Kinsale Capital Group, Inc. (KNSL - Free Report) has been favored by investors on the back of solid Excess & Surplus (“E&S”) market, strong premium growth, operating cash flows and prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for Kinsale Capital’s 2023 earnings is pegged at $11.53 per share, indicating a 47.8% increase from the year-ago reported figure on 48.2% higher revenues of $1.21 billion. The consensus estimate for 2024 earnings is pegged at $14.07 per share, indicating a 22% increase from the year-ago reported figure on 25.8% higher revenues of $1.53 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 has moved 3.3% and 3.1% north, respectively, in the past seven days, reflecting analysts’ optimism.
Earnings Surprise History
KNSL has a solid earnings surprise history. It beat estimates in each of the last four quarters, the average being 14.88%.
Zacks Rank & Price Performance
Shares of this Zacks Rank #2 (Buy) property and casualty insurer have gained 35.3% in a year, outperforming the industry’s growth of 12.5%. We expect the company’s policy to ramp up its growth profile and capital position and drive shares higher.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Kinsale Capital’s annualized operating ROE expanded 600 basis points year over year to 30.6% in the first half of 2023. The increase in annualized operating ROE was attributable largely to continued profitable growth from continuing favorable market conditions and rate increases.
Business Tailwinds
KNSL’s premium income is expected to improve in the near term on the back of higher submission activity from brokers and increased rates across most lines of business, resulting from continued favorable conditions in the E&S market.
The combination of highly controlled underwriting merged with advanced technology-driven low costs and a focus on the E&S Lines Insurance market is driving the profitability and growth of Kinsale Capital.
The E&S Lines Insurance segment continues to witness rapid growth owing to dislocation in the overall property and casualty market.
Net investment income witnessed a compound annual growth rate (CAGR) of 31.8% in the last eight years (2015-2022). Riding on the growth in investment portfolio largely generated from the investment of strong operating cash flows and higher interest rates relative to the prior-year period, the momentum was retained in the first half of 2023 with the metric more than doubled year over year to $44.9 million.
A combination of premium growth and favorable rate increases from a strong underwriting environment and lower levels of operating expenses relative to premium growth and management's cost control efforts are expected to drive the underwriting income of the insurer.
The expense ratio is expected to gain from lower net commissions incurred and reduced other underwriting expenses as a percentage of earned premiums, economies of scale from premium expansion and management's continued focus on controlling costs.
Strong cash flows enable the property and casualty insurer to engage in shareholder-friendly moves like dividend hikes. Banking on solid cash flow, KNSL has increased dividend since 2017 at an eight-year (2016-2023) CAGR of 13.7%.
Kinsale Capital has an impressive Growth Score of A. This style score helps analyze the growth prospects of a company.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are Arch Capital Group Ltd. (ACGL - Free Report) , Axis Capital Holdings Limited (AXS - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) . While Arch Capital and Axis Capital sport a Zacks Rank #1 (Strong Buy) each, Cincinnati Financial carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 26.83%. In the past year, ACGL has gained 62.7%.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings per share is pegged at $6.58 and $7.25, indicating a year-over-year increase of 35.1% and 10.2%, respectively.
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 9.75%. In the past year, AXS has gained 0.8%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.18 and $9.17, indicating a year-over-year increase of 40.7% and 12.1%, respectively.
Cincinnati Financial has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 25.25%. In the past year, CINF has lost 0.8%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 earnings per share is pegged at $5 and $5.88, indicating a year-over-year increase of 17.9% and 17.6%, respectively.
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Why It's Worth Betting on Kinsale Capital (KNSL) Stock Now
Kinsale Capital Group, Inc. (KNSL - Free Report) has been favored by investors on the back of solid Excess & Surplus (“E&S”) market, strong premium growth, operating cash flows and prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for Kinsale Capital’s 2023 earnings is pegged at $11.53 per share, indicating a 47.8% increase from the year-ago reported figure on 48.2% higher revenues of $1.21 billion. The consensus estimate for 2024 earnings is pegged at $14.07 per share, indicating a 22% increase from the year-ago reported figure on 25.8% higher revenues of $1.53 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 has moved 3.3% and 3.1% north, respectively, in the past seven days, reflecting analysts’ optimism.
Earnings Surprise History
KNSL has a solid earnings surprise history. It beat estimates in each of the last four quarters, the average being 14.88%.
Zacks Rank & Price Performance
Shares of this Zacks Rank #2 (Buy) property and casualty insurer have gained 35.3% in a year, outperforming the industry’s growth of 12.5%. We expect the company’s policy to ramp up its growth profile and capital position and drive shares higher.
Image Source: Zacks Investment Research
Return on Equity (ROE)
Kinsale Capital’s annualized operating ROE expanded 600 basis points year over year to 30.6% in the first half of 2023. The increase in annualized operating ROE was attributable largely to continued profitable growth from continuing favorable market conditions and rate increases.
Business Tailwinds
KNSL’s premium income is expected to improve in the near term on the back of higher submission activity from brokers and increased rates across most lines of business, resulting from continued favorable conditions in the E&S market.
The combination of highly controlled underwriting merged with advanced technology-driven low costs and a focus on the E&S Lines Insurance market is driving the profitability and growth of Kinsale Capital.
The E&S Lines Insurance segment continues to witness rapid growth owing to dislocation in the overall property and casualty market.
Net investment income witnessed a compound annual growth rate (CAGR) of 31.8% in the last eight years (2015-2022). Riding on the growth in investment portfolio largely generated from the investment of strong operating cash flows and higher interest rates relative to the prior-year period, the momentum was retained in the first half of 2023 with the metric more than doubled year over year to $44.9 million.
A combination of premium growth and favorable rate increases from a strong underwriting environment and lower levels of operating expenses relative to premium growth and management's cost control efforts are expected to drive the underwriting income of the insurer.
The expense ratio is expected to gain from lower net commissions incurred and reduced other underwriting expenses as a percentage of earned premiums, economies of scale from premium expansion and management's continued focus on controlling costs.
Strong cash flows enable the property and casualty insurer to engage in shareholder-friendly moves like dividend hikes. Banking on solid cash flow, KNSL has increased dividend since 2017 at an eight-year (2016-2023) CAGR of 13.7%.
Kinsale Capital has an impressive Growth Score of A. This style score helps analyze the growth prospects of a company.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are Arch Capital Group Ltd. (ACGL - Free Report) , Axis Capital Holdings Limited (AXS - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) . While Arch Capital and Axis Capital sport a Zacks Rank #1 (Strong Buy) each, Cincinnati Financial carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 26.83%. In the past year, ACGL has gained 62.7%.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings per share is pegged at $6.58 and $7.25, indicating a year-over-year increase of 35.1% and 10.2%, respectively.
Axis Capital has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 9.75%. In the past year, AXS has gained 0.8%.
The Zacks Consensus Estimate for AXS’ 2023 and 2024 earnings per share is pegged at $8.18 and $9.17, indicating a year-over-year increase of 40.7% and 12.1%, respectively.
Cincinnati Financial has a solid track record of beating earnings estimates in three of the last four quarters and missing in one, the average being 25.25%. In the past year, CINF has lost 0.8%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 earnings per share is pegged at $5 and $5.88, indicating a year-over-year increase of 17.9% and 17.6%, respectively.