Should You Add Allied World (AWH) to Your Portfolio Now? - Analyst Blog
On Jun 3, 2015, Zacks Investment Research upgraded Allied World Assurance Company Holdings, AG AWH to a Zacks Rank #2 (Buy).
Allied World has been witnessing increasing earnings estimates after it came up with solid first-quarter 2015 results and announced the intention to share more profits with shareholders. With respect to its performance, this Zacks Rank #3 (Hold) property and casualty insurer delivered positive earnings surprises for three straight quarters, with an average beat of 48%.
In the first quarter, Allied World delivered operating earnings of 93 cents per share that outperformed the Zacks Consensus by 19.2%. Strong underwriting results, ramping up of its Insurance platform, and solid investment results continue to drive the company’s performance. Revenues improved 4.3% on 7.2% higher premiums in the quarter.
Sustained solid performance lends support to company’s initiative to enhance shareholder value. Last month, the board of directors approved a 16% hike in the company’s annual dividend. This move not only instills investor confidence but also attracts investors. Given the latest hike, the company has increased its annual dividend by over 50% over the last two years. Moreover, the company also bought back shares worth $50.9 million in the first quarter. With another $18 million spent in the second quarter, the company has $350 million remaining under its authorization.
These positives resulted in an upward revision of the Zacks Consensus Estimate for 2015 and 2016 in the last 60 days. It increased 5.6% to $3.04 for 2015 and by 2% to $3.03 for 2016. The expected long-term earnings growth rate for the stock is 6.6%.
Other Stocks to Consider
Investors interested in property and casualty insurers may also look at Endurance Specialty Holdings Ltd. ENH, Markel Corp. MKL and State Auto Financial Corp. STFC. All these sport a Zacks Rank #1 (Strong Buy).
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MARKEL CORP (MKL): Free Stock Analysis Report
ENDURANCE SPLTY (ENH): Free Stock Analysis Report
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ALLIED WORLD AS (AWH): Free Stock Analysis Report
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