Verisk Analytics, Inc. (VRSK Quick QuoteVRSK - Free Report) has had an impressive run year to date. The stock has gained 21%, outperforming the 17% rally of the industry it belongs to.

What’s Behind VRSK’s Rally

Verisk posted better-than-expected earnings performance in the past three quarters, driven by strong growth in underwriting & rating and claims.

Verisk’s decision to transition its business model from transactions to subscriptions favors its recurring revenues.Since the market trends give a higher valuation to SaaS companies, there’s also a direct benefit from this model to shareholders in the long run. Furthermore, the introduction of Claims Coverage Identifier and Provider Scoring services can appeal to new customers and move existing customers to subscription-based solutions.

Acquisitions play a vital role in Verisk's growth strategy, as it consistently invests in global companies to enhance its data and analytics capabilities. The April 2023 acquisition of Krug expanded the company's claims and casualty services across Europe. The acquisition of Mavera in February 2023 helped the company to expand in the European region and supported continuous growth in the global insurance industry as a technology and analytics partner.

Verisk has a consistent record of rewarding its shareholders through dividend payments and share repurchases. In 2023, Verisk paid $196.8 as dividends and repurchased shares worth $2.8 billion. In 2022, Verisk paid $195.2 as dividends and repurchased shares worth 1.7 billion. In 2021, the company paid $188.2 million in dividends and repurchased shares worth $475 million. Steadily increasing shareholder returns boost share prices as investors increasingly look for returns in unstable or uncertain markets.

Zacks Rank and Stocks to Consider

Verisk currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Business Services sector are AppLovin (APP Quick QuoteAPP - Free Report) and Parsons (PSN Quick QuotePSN - Free Report) .

AppLovin flaunts a Zacks Rank of 1 (Strong Buy) at present. It has a long-term earnings growth expectation of 20%. You can see the complete list of today’s Zacks #1 Rank stocks here.

APP delivered a trailing four-quarter earnings surprise of 26.2%, on average.

Parsons sports a Zacks Rank of 1 at present. It has a long-term earnings growth expectation of 18.6%.

PSN delivered a trailing four-quarter earnings surprise of 17.5%, on average.