On Mar 14, 2013, shares of Loews Corporation (L) hit a 52-week high of $44.68.
Loews saw a 3% year over year top line growth in 2012. Results also exceeded the Zacks Consensus Estimate by 4.3%. Higher insurance premiums coupled with an increase in net investment income and contract drilling revenues, led to the overall improvement in top line.
Loews also has been continuously working towards strengthening its hotel business and tripling its net income by 2015. Loews remains on track to strengthen its hotel business by doubling its hotel count within the next three to five years.
It acquired two hotels in 2012, one in Jan 2013 and one in Feb 2013 and has two more under construction. The company’s total number of hotels stands at 21.
It also forayed into the natural gas liquids business with the acquisition of PL Midstream.
Moreover, the Loews subsidiary Diamond Offshore continues to work on improving its fleet. Strong balance sheet with low leverage and adequate cash and strong rating scores are among the positives.
Loews delivered positive earnings surprise in 2 of 4 quarters in 2012. The Zacks Consensus Estimate for 2013 is pegged at $3.37 representing a year-over-year growth of 37.91%. For 2014, the Zacks Consensus Estimate is $4.04 representing a year-over-year improvement of 19.91%.
The shares are trading at a 13.5% discount to the peer group average on a price to book basis. The 1-year return from the stock is 15.5%, much above the S&P 500’s return of 14.0%.
Loews currently carries a Zacks Rank #3 (Hold). Among others from the industry, AXA Group (AXAHY), CNO Financial Group (CNO) and Assured Guaranty (AGO) carry a favorable Zacks Rank #1 (Strong Buy) and are worth noting.
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