On March 25, 2014, shares of Maiden Holdings, Ltd. (MHLD) touched a 52-week high of $13.48. The momentum was driven by solid fourth-quarter and full-year 2013 earnings results at the company. The year-to-date return for the stock came in at 20.0%, way ahead of the NASDAQ’s return of 0.37%.
The fourth-quarter earnings figure at Maiden Holdings clocked a positive surprise beat of 7.1%. This helped the property and casualty insurer deliver positive earnings surprises in all of the last 4 quarters, registering an average beat of 9.28%. Full-year 2013 earnings also exceeded the Zacks Consensus Estimate by 2.6% and escalated 78.8% year over year.
Quarterly results rebounded from the year-ago loss on the strength of sturdy organic growth coupled with declining expenses during the quarter.
Higher premiums and increased investment income drove revenues 2.9% higher year over year. In addition, total expense declined 3.9% year over year reflecting lower net loss and loss adjustment expenses.
Owing to the absence of any adverse impact from catastrophe losses during the quarter, combined ratio of Maiden Holdings improved 640 basis points year over year to 97.3%
These positives also reflected in earnings estimate revisions. The Zacks Consensus Estimate for 2014 and 2015 witnessed most of the estimates moving north over the last 60 days. The Zacks Consensus Estimate for 2014 is currently pegged at $1.46, while the same for 2015 stands at $1.70, both increasing by a penny each. The expected long-term growth rate for the stock is 12%.
Maiden Holdings is committed to achieve its combined ratio target of 96%. It also envisions operating returns on equity of about 15% in the medium term.
Maiden Holdings presently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the property and casualty industry include Alleghany Corporation (Y), AmTrust Financial Services, Inc. (AFSI) and Atlas Financial Holdings, Inc. (AFH). All these stocks sport a Zacks Rank #1 (Strong Buy).
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