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Reasons Why Investors Should Retain Assurant (AIZ) Stock Now
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Assurant, Inc. (AIZ - Free Report) has been favored by investors on the back of its well-performing Global Lifestyle business, growth of fee-based capital-light businesses, solid capital management, favorable estimates and effective capital deployment.
Earnings Estimates
The Zacks Consensus Estimate for Assurant’s 2024 earnings per share indicates a year-over-year increase of 4.5%. The consensus estimate for revenues is pegged at $11.68 billion, implying a year-over-year improvement of 4.2%.
The consensus estimate for 2025 earnings per share and revenues indicates a year-over-year increase of 3.6% and 3.2%, respectively, from the corresponding 2024 estimates.
Earnings have improved 20.2% in the past five years, better than the industry average of 9.2%.
Earnings Surprise History
Assurant has a decent surprise history, beating earnings estimates in each of the last four quarters, the average surprise being 42.47%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2024 earnings has moved up nearly 3.3% in the past 60 days, reflecting investors’ optimism.
Return on Equity (ROE)
ROE is a measure reflecting how efficiently a company utilizes shareholders’ money. The multi-line insurer’s ROE of 20.1% improved by 760 basis points year over year. The figure is better than the industry average of 14.1%.
Zacks Rank
The company currently carries a Zacks Rank #3 (Hold). Over the past year, shares of AIZ have gained 33.6% compared with the industry’s growth of 20.5%.
Image Source: Zacks Investment Research
Business Tailwinds
Assurant’s focus on growing fee-based capital-light businesses that presently constitute 52% of segmental revenues bodes well for growth. Management estimates that contribution from the same will continue to grow in double digits over the longer term.
Better performance in Homeowners reflecting higher lender-placed net earned premiums should drive better results at Global Housing. At the same time, growth across Connected Living and Global Automotive should drive Global Lifestyle.
The insurer remains focused on ramping up the Connected Living platform, deploying innovative products and services, and adding new partnerships. These initiatives are expected to double the margins of Connected Living to 8% over the long term.
Investment income, which has been witnessing an increase in net investment income over the past few years, should benefit from higher yields on fixed-maturity securities.
AIZ has a solid capital management policy in place. The insurer has been increasing dividends for the last 19 straight years. During the first quarter of 2024, AIZ repurchased approximately shares for $40 million and paid $37 million in dividends. Assurant expects share repurchases in the range of $200-$300 million for 2024. Notably, its free cash flow conversion has remained more than 100% over the last many quarters, reflecting its solid earnings.
However, Assurant has been experiencing an increase in policyholder benefits, underwriting, general and administrative expenses and interest expenses, which can put a strain on the margin. Also, its insurance operations remain exposed to claims arising from catastrophes and non-catastrophes, particularly in homeowners insurance, renters insurance and flood offerings. This results in increased claims and higher catastrophe losses, which could have a material adverse effect on the results of financial conditions.
Radian Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 22.79%. Over the past year, shares of RDN have jumped 24.8%.
The Zacks Consensus Estimate for RDN’s 2024 and 2025 revenues implies year-over-year growth of 8.2% and 4.9%, respectively.
Old Republic International has a solid track record of beating earnings estimates in three of the last four quarters while missing in one, the average being 6.61%. Over the past year, shares of ORI have climbed 25.7%.
The Zacks Consensus Estimate for ORI’s 2024 and 2025 earnings implies year-over-year growth of 3.8% and 4.4%, respectively.
EverQuote has a solid track record of beating earnings estimates in the trailing four quarters, averaging 65.16%. Over the past year, shares of EVER have rallied 197.8%.
The Zacks Consensus Estimate for EVER’s 2024 and 2025 earnings implies year-over-year growth of 103.2% and 276.6%, respectively.
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Reasons Why Investors Should Retain Assurant (AIZ) Stock Now
Assurant, Inc. (AIZ - Free Report) has been favored by investors on the back of its well-performing Global Lifestyle business, growth of fee-based capital-light businesses, solid capital management, favorable estimates and effective capital deployment.
Earnings Estimates
The Zacks Consensus Estimate for Assurant’s 2024 earnings per share indicates a year-over-year increase of 4.5%. The consensus estimate for revenues is pegged at $11.68 billion, implying a year-over-year improvement of 4.2%.
The consensus estimate for 2025 earnings per share and revenues indicates a year-over-year increase of 3.6% and 3.2%, respectively, from the corresponding 2024 estimates.
Earnings have improved 20.2% in the past five years, better than the industry average of 9.2%.
Earnings Surprise History
Assurant has a decent surprise history, beating earnings estimates in each of the last four quarters, the average surprise being 42.47%.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2024 earnings has moved up nearly 3.3% in the past 60 days, reflecting investors’ optimism.
Return on Equity (ROE)
ROE is a measure reflecting how efficiently a company utilizes shareholders’ money. The multi-line insurer’s ROE of 20.1% improved by 760 basis points year over year. The figure is better than the industry average of 14.1%.
Zacks Rank
The company currently carries a Zacks Rank #3 (Hold). Over the past year, shares of AIZ have gained 33.6% compared with the industry’s growth of 20.5%.
Image Source: Zacks Investment Research
Business Tailwinds
Assurant’s focus on growing fee-based capital-light businesses that presently constitute 52% of segmental revenues bodes well for growth. Management estimates that contribution from the same will continue to grow in double digits over the longer term.
Better performance in Homeowners reflecting higher lender-placed net earned premiums should drive better results at Global Housing. At the same time, growth across Connected Living and Global Automotive should drive Global Lifestyle.
The insurer remains focused on ramping up the Connected Living platform, deploying innovative products and services, and adding new partnerships. These initiatives are expected to double the margins of Connected Living to 8% over the long term.
Investment income, which has been witnessing an increase in net investment income over the past few years, should benefit from higher yields on fixed-maturity securities.
AIZ has a solid capital management policy in place. The insurer has been increasing dividends for the last 19 straight years. During the first quarter of 2024, AIZ repurchased approximately shares for $40 million and paid $37 million in dividends. Assurant expects share repurchases in the range of $200-$300 million for 2024. Notably, its free cash flow conversion has remained more than 100% over the last many quarters, reflecting its solid earnings.
However, Assurant has been experiencing an increase in policyholder benefits, underwriting, general and administrative expenses and interest expenses, which can put a strain on the margin. Also, its insurance operations remain exposed to claims arising from catastrophes and non-catastrophes, particularly in homeowners insurance, renters insurance and flood offerings. This results in increased claims and higher catastrophe losses, which could have a material adverse effect on the results of financial conditions.
Stocks to Consider
Some better-ranked stocks from the multi-line insurance industry are Radian Group Inc. (RDN - Free Report) , Old Republic International Corporation (ORI - Free Report) and EverQuote, Inc. (EVER - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Radian Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 22.79%. Over the past year, shares of RDN have jumped 24.8%.
The Zacks Consensus Estimate for RDN’s 2024 and 2025 revenues implies year-over-year growth of 8.2% and 4.9%, respectively.
Old Republic International has a solid track record of beating earnings estimates in three of the last four quarters while missing in one, the average being 6.61%. Over the past year, shares of ORI have climbed 25.7%.
The Zacks Consensus Estimate for ORI’s 2024 and 2025 earnings implies year-over-year growth of 3.8% and 4.4%, respectively.
EverQuote has a solid track record of beating earnings estimates in the trailing four quarters, averaging 65.16%. Over the past year, shares of EVER have rallied 197.8%.
The Zacks Consensus Estimate for EVER’s 2024 and 2025 earnings implies year-over-year growth of 103.2% and 276.6%, respectively.