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Assurant Stock Rises 39.3% in a Year: More Room for Growth?
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Assurant, Inc.’s (AIZ - Free Report) shares have rallied 39.3% in a year compared with the industry's growth of 26.4%. The Finance sector and the Zacks S&P 500 index have returned 27.9% and 27.1% in the said time frame, respectively. With a market capitalization of $9.98 billion, the average volume of shares traded in the last three months was 0.3 million.
Image Source: Zacks Investment Research
The rally was largely driven by the well-performing Global Lifestyle business, growth of fee-based capital-light businesses, solid capital management, favorable estimates and effective capital deployment.
This Zacks Rank #1 (Strong Buy) multi-line insurer delivered a four-quarter average earnings surprise of 33.56%. The multi-line insurer’s return on equity (ROE) of 19.6% improved 590 basis points year over year. The figure is better than the industry average of 16.3%. ROE is a measure reflecting how efficiently a company utilizes shareholders’ money.
The Zacks Consensus Estimate for Assurant’s 2024 and 2025 earnings has moved 2.9% and 4.5% north, respectively, in the past 30 days, reflecting analysts’ optimism.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Assurant’s 2024 earnings per share indicates a year-over-year increase of 6.7%. The consensus estimate for revenues is pegged at $11.74 billion, implying a year-over-year improvement of 4.8%. The consensus estimate for 2025 earnings per share and revenues indicates a year-over-year increase of 6.1% and 3.1%, respectively, from the corresponding 2024 estimates. Earnings have improved 20.2% in the past five years, better than the industry average of 9%.
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.
Style Score
The insurer has a VGM Score of B. The VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum. Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best opportunities in the value investing space.
Attractive Valuation
AIZ shares are trading at a price-to-book value multiple of 2, lower than the industry average of 2.7. It also has an impressive Value Score of A. This style score helps find the most attractive value stocks.
Prudent Capital Deployment
AIZ has a solid capital management policy in place. The insurer has been increasing dividends for the last 19 straight years. Assurant expects to be on the high-end of $200 million to $300 million share repurchases range for 2024. Notably, its free cash flow conversion has remained more than 100% over the last many quarters, reflecting its solid earnings.
Radian Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 21.3%. In the past year, shares of RDN have jumped 33%.
The Zacks Consensus Estimate for RDN’s 2024 and 2025 revenues implies year-over-year growth of 6.2% and 5.5%, 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 9%. In the past year, shares of ORI have climbed 29.2%.
The Zacks Consensus Estimate for ORI’s 2024 and 2025 earnings implies year-over-year growth of 7.6% and 4.4%, respectively.
EverQuote has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 144.9%. In the past year, shares of EVER have rallied 315.6%.
The Zacks Consensus Estimate for EVER’s 2024 and 2025 earnings implies year-over-year growth of 137% and 43.8%, respectively.
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Assurant Stock Rises 39.3% in a Year: More Room for Growth?
Assurant, Inc.’s (AIZ - Free Report) shares have rallied 39.3% in a year compared with the industry's growth of 26.4%. The Finance sector and the Zacks S&P 500 index have returned 27.9% and 27.1% in the said time frame, respectively. With a market capitalization of $9.98 billion, the average volume of shares traded in the last three months was 0.3 million.
Image Source: Zacks Investment Research
The rally was largely driven by the well-performing Global Lifestyle business, growth of fee-based capital-light businesses, solid capital management, favorable estimates and effective capital deployment.
This Zacks Rank #1 (Strong Buy) multi-line insurer delivered a four-quarter average earnings surprise of 33.56%. The multi-line insurer’s return on equity (ROE) of 19.6% improved 590 basis points year over year. The figure is better than the industry average of 16.3%. ROE is a measure reflecting how efficiently a company utilizes shareholders’ money.
The Zacks Consensus Estimate for Assurant’s 2024 and 2025 earnings has moved 2.9% and 4.5% north, respectively, in the past 30 days, reflecting analysts’ optimism.
Will the Bull Run Continue?
The Zacks Consensus Estimate for Assurant’s 2024 earnings per share indicates a year-over-year increase of 6.7%. The consensus estimate for revenues is pegged at $11.74 billion, implying a year-over-year improvement of 4.8%. The consensus estimate for 2025 earnings per share and revenues indicates a year-over-year increase of 6.1% and 3.1%, respectively, from the corresponding 2024 estimates. Earnings have improved 20.2% in the past five years, better than the industry average of 9%.
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.
Style Score
The insurer has a VGM Score of B. The VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best opportunities in the value investing space.
Attractive Valuation
AIZ shares are trading at a price-to-book value multiple of 2, lower than the industry average of 2.7. It also has an impressive Value Score of A. This style score helps find the most attractive value stocks.
Prudent Capital Deployment
AIZ has a solid capital management policy in place. The insurer has been increasing dividends for the last 19 straight years. Assurant expects to be on the high-end of $200 million to $300 million share repurchases range for 2024. Notably, its free cash flow conversion has remained more than 100% over the last many quarters, reflecting its solid earnings.
Other Stocks to Consider
Some other top-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 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Radian Group has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 21.3%. In the past year, shares of RDN have jumped 33%.
The Zacks Consensus Estimate for RDN’s 2024 and 2025 revenues implies year-over-year growth of 6.2% and 5.5%, 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 9%. In the past year, shares of ORI have climbed 29.2%.
The Zacks Consensus Estimate for ORI’s 2024 and 2025 earnings implies year-over-year growth of 7.6% and 4.4%, respectively.
EverQuote has a solid track record of beating earnings estimates in each of the trailing four quarters, the average being 144.9%. In the past year, shares of EVER have rallied 315.6%.
The Zacks Consensus Estimate for EVER’s 2024 and 2025 earnings implies year-over-year growth of 137% and 43.8%, respectively.