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Bull of the Day: W.R. Berkley Corp. (WRB)

The Zacks Finance sector has been relatively strong in 2022, down roughly 12% vs. the S&P 500’s decline of 17%.

A company that many are familiar with residing in the sector, W.R. Berkley WRB, has seen its near-term earnings outlook turn bright over the last several months, helping land the stock into the highly-coveted Zacks Rank #1 (Strong Buy).

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

W.R. Berkley is one of the nation’s most extensive commercial lines property casualty insurance providers. The company offers various insurance services, from reinsurance to workers’ compensation third-party administrators (TPAs).

Let’s take a deeper dive into how the company currently stacks up.

Share Performance & Valuation

WRB shares have been notably hot year-to-date, tacking on more than 30% in value and crushing the S&P 500’s performance.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

And over the last three months, WRB shares have continued on their market-beating trajectory, up nearly 9%.

The favorable price action of WRB shares in 2022 indicates that buyers have been consistently present, something we can’t say for the majority of stocks in a historically-volatile 2022.

Shares currently trade at a 16.8X forward earnings multiple, nicely beneath the 20.2X five-year median and highs of 21.5X in 2021.

W.R. Berkley sports a Style Score of a B for Value.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Growth Outlook

W.R. Berkley’s growth projections are hard to ignore, with earnings forecasted to climb a double-digit 26% in FY22 and a further 10.5% in FY23.

The projected earnings growth comes on top of forecasted Y/Y revenue growth of 16% and 10.3% in FY22 and FY23, respectively.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Dividends

For those who like income, the company pays out a small dividend; WRB’s annual dividend yield comes in at 0.5%, lower than its Zacks Finance sector average.

While the yield may be on the lower end, the company’s dividend growth picks up the slack – WRB has upped its dividend nine times over the last five years, translating to a robust 9.8% five-year annualized dividend growth rate.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Quarterly Performance

WRB has impressed with its quarterly results as of late, exceeding both the Zacks Consensus EPS and Sales Estimates in back-to-back quarters.

In its latest release, the company penciled in a sizable 23.2% bottom-line beat paired with a 2.7% sales surprise. Below is a chart illustrating the company’s revenue on a quarterly basis.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Bottom Line

One of the best ways investors can find expected winners is by utilizing the Zacks Rank – one of the most potent market tools out there that gives investors a massive advantage.

The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.

W.R. Berkley WRB would be an excellent stock for investors to keep on their watchlists, as displayed by its Zack Rank #1 (Strong Buy).


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Zacks Investment Research