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Should You Buy AXIS Capital (AXS) for Better Returns Now?
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AXIS Capital Holdings Limited’s (AXS - Free Report) underwriting excellence, a compelling and diversified product portfolio, digital capabilities, solid capital position and favorable growth estimates make this leading specialty insurer and global reinsurer, aiming leadership in specialty risks, worth adding to one’s portfolio.
AXS has a VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
Zacks Rank & Price Performance
AXS currently sports a Zacks Rank #1 (Strong Buy). Year to date, the stock has gained 2.5% compared with the industry’s increase of 13.1%.
Image Source: Zacks Investment Research
Optimistic Growth Projection
The Zacks Consensus Estimate for 2023 earnings is pegged at $8.41, indicating an increase of 44.8% on 7.9% higher revenues of $5.7 billion. The consensus estimate for 2024 earnings is pegged at $9.31, indicating an increase of 10.7% on 7.5% higher revenues of $6.2 billion.
The expected long-term earnings growth rate is pegged at 5%.
Earnings Surprise History
Axis Capital has a decent record of delivering an earnings surprise in three of the last four quarters while missed in the other one. Earnings have grown 39% in the past five years, better than the industry average of 17%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 10.4% and 9.8% north, respectively, in the past 60 days, reflecting analyst optimism.
Business Tailwinds
Axis Capital’s strategic initiatives bode well for growth. Its exit from the Reinsurance Catastrophe and Property business last year lowered earnings volatility. Marine Cargo, Cyber and Renewable Energy provide strong double-digit return on equity (ROE) opportunities. AXIS Capital forayed into the pet insurance market via its Accident and Health business line. Its combined insurance and reinsurance portfolios have witnessed average rate increases in double digits.
Its insurance business should continue to benefit from a diversified portfolio of global specialty business, leadership positions and growth opportunities across major business lines. The Reinsurance business should benefit from strong cycle management that focuses on improving the business mix.
Axis Capital has a solid capital position that supports effective capital deployment. The insurer prioritizes investing in growth initiatives that ramp up specialty businesses. As part of capital allocation, AXS has hiked its dividend for 18 consecutive years at an eight-year CAGR (2015 – 2022) of 5.3%. Its dividend yield is currently 3.2%, way above the industry average of 0.3%. The insurer boasts one of the highest dividend yields among its peers. This apart, AXS also has a $100 million share buyback remaining under its authorization for this year.
Attractive Valuation
AXS’ shares are trading at a price-to-book multiple of 1.06, lower than the industry average of 1.44.
The company has a Value Score of B. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B combined with a Zacks Rank #1 or #2 (Buy) offer better returns.
Before its valuation expands, it is advisable to take a position in the stock.
Arch Capital’s earnings surpassed estimates in all the last four quarters, the average beat being 26.83%. The stock has gained 2.9% quarter to date.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings indicates a 38.2% and 10.4% year-over-year increase, respectively. The expected long-term earnings growth is 10%. The consensus estimate for 2023 and 2024 has moved up 2.3% and 2.5%, respectively, in the past 30 days.
HCI delivered a trailing four-quarter average earnings surprise of 448.41%. Year to date, the stock has gained 38.9%.
The Zacks Consensus Estimate for HCI’s 2023 and 2024 earnings indicates a 159.3% and 33.8 year-over-year increase, respectively.
ProAssurance’s earnings surpassed estimates in two of the last four quarters while missing in the other two. Year to date, the stock has gained 19.8%.
The Zacks Consensus Estimate for PRA’s 2024 earnings implies a year-over-year rise of 143.5%. The consensus estimate for PRA’s 2023 and 2024 earnings has moved up 25.9% and 2.5%, respectively, in the past 30 days.
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Should You Buy AXIS Capital (AXS) for Better Returns Now?
AXIS Capital Holdings Limited’s (AXS - Free Report) underwriting excellence, a compelling and diversified product portfolio, digital capabilities, solid capital position and favorable growth estimates make this leading specialty insurer and global reinsurer, aiming leadership in specialty risks, worth adding to one’s portfolio.
AXS has a VGM Score of B. This helps to identify stocks with the most attractive value, growth and momentum.
Zacks Rank & Price Performance
AXS currently sports a Zacks Rank #1 (Strong Buy). Year to date, the stock has gained 2.5% compared with the industry’s increase of 13.1%.
Image Source: Zacks Investment Research
Optimistic Growth Projection
The Zacks Consensus Estimate for 2023 earnings is pegged at $8.41, indicating an increase of 44.8% on 7.9% higher revenues of $5.7 billion. The consensus estimate for 2024 earnings is pegged at $9.31, indicating an increase of 10.7% on 7.5% higher revenues of $6.2 billion.
The expected long-term earnings growth rate is pegged at 5%.
Earnings Surprise History
Axis Capital has a decent record of delivering an earnings surprise in three of the last four quarters while missed in the other one. Earnings have grown 39% in the past five years, better than the industry average of 17%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 10.4% and 9.8% north, respectively, in the past 60 days, reflecting analyst optimism.
Business Tailwinds
Axis Capital’s strategic initiatives bode well for growth. Its exit from the Reinsurance Catastrophe and Property business last year lowered earnings volatility. Marine Cargo, Cyber and Renewable Energy provide strong double-digit return on equity (ROE) opportunities. AXIS Capital forayed into the pet insurance market via its Accident and Health business line. Its combined insurance and reinsurance portfolios have witnessed average rate increases in double digits.
Its insurance business should continue to benefit from a diversified portfolio of global specialty business, leadership positions and growth opportunities across major business lines. The Reinsurance business should benefit from strong cycle management that focuses on improving the business mix.
Axis Capital has a solid capital position that supports effective capital deployment. The insurer prioritizes investing in growth initiatives that ramp up specialty businesses. As part of capital allocation, AXS has hiked its dividend for 18 consecutive years at an eight-year CAGR (2015 – 2022) of 5.3%. Its dividend yield is currently 3.2%, way above the industry average of 0.3%. The insurer boasts one of the highest dividend yields among its peers. This apart, AXS also has a $100 million share buyback remaining under its authorization for this year.
Attractive Valuation
AXS’ shares are trading at a price-to-book multiple of 1.06, lower than the industry average of 1.44.
The company has a Value Score of B. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B combined with a Zacks Rank #1 or #2 (Buy) offer better returns.
Before its valuation expands, it is advisable to take a position in the stock.
Other Stocks to Consider
Some other top-ranked stocks from the insurance space are Arch Capital Group (ACGL - Free Report) , HCI Group (HCI - Free Report) and ProAssurance (PRA - Free Report) . Each of these companies presently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital’s earnings surpassed estimates in all the last four quarters, the average beat being 26.83%. The stock has gained 2.9% quarter to date.
The Zacks Consensus Estimate for ACGL’s 2023 and 2024 earnings indicates a 38.2% and 10.4% year-over-year increase, respectively. The expected long-term earnings growth is 10%. The consensus estimate for 2023 and 2024 has moved up 2.3% and 2.5%, respectively, in the past 30 days.
HCI delivered a trailing four-quarter average earnings surprise of 448.41%. Year to date, the stock has gained 38.9%.
The Zacks Consensus Estimate for HCI’s 2023 and 2024 earnings indicates a 159.3% and 33.8 year-over-year increase, respectively.
ProAssurance’s earnings surpassed estimates in two of the last four quarters while missing in the other two. Year to date, the stock has gained 19.8%.
The Zacks Consensus Estimate for PRA’s 2024 earnings implies a year-over-year rise of 143.5%. The consensus estimate for PRA’s 2023 and 2024 earnings has moved up 25.9% and 2.5%, respectively, in the past 30 days.