Chubb Limited’s CB share price rally makes the stock an investor favorite. Shares of the company have gained 14.9% year to date, outperforming the industry's rise of 4.6% and the Zacks S&P 500 composite’s increase of 14%. With market capitalization of $67.9 billion, average volume of shares traded in the last three months was 1.3 million. In fact, shares of the company hit a new 52-week high of $152.00 in yesterday’s trading session.
What’s Behind the Upside?
Chubb’s return on equity — a measure of profitability — is 8.8%, better than the industry average of 7.1%. This reflects the company’s prudent usage of its shareholders’ funds.
The company also rewards its shareholders with dividend hike and share repurchases, reflecting effective capital deployment. The 3% hike in dividend approved in May marks the 26th consecutive dividend increase. Its dividend yield of nearly 2% betters the industry average of 0.4%, making it an attractive pick for yield-seeking investors.
Chubb has a stellar history of delivering positive earnings surprise for the last 11 quarters, reflecting operational excellence.
The company has a favorable VGM Score of B. This style score helps to identify stocks with the most attractive value, best growth, and most promising momentum.
Will the Rally Continue?
Chubb is focusing on cyber insurance that has immense room for growth. Also, the company has been putting in efforts to capitalize on the potential of middle-market businesses, both domestic and international, with its traditional core package as well as specialty product.
Chubb believes its accident & health and personal lines business are well poised for growth. Its U.S. small commercial business has been displaying momentum and thus expects this business to have an annual run rate of premium that can be in the multi-billion dollar range in the next three to five years.
The company’s distribution agreements have expanded its network, thus boosting its market presence.
Chubb boasts a strong capital position with sufficient cash generation capabilities that help it deploy capital effectively and pursue growth initiatives.
Chubb currently carries a Zacks Rank #3 (Hold). With optimism surrounding the stock’s healthy performance, the Zacks Consensus Estimate for 2019 has been revised up by a cent in the past 30 days.
The consensus mark for earnings translates into year-over-year improvement for both 2019 and 2020. The long-term expected earnings growth rate is currently pegged at 10%. Also, the company has an impressive Growth Score of A. This style score analyzes the growth prospects of a company.
Stocks to Consider
Some better-ranked property and casualty insurance stocks are Alleghany Corporation Y, Argo Group International Holdings, Ltd. ARGO and CNA Financial Corporation CNA. Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alleghany Corporation provides property and casualty reinsurance and insurance products in the United States and internationally. The company delivered positive surprise of 32.51% in the last reported quarter.
Argo Group underwrites specialty insurance and reinsurance products in the property and casualty markets. The company delivered positive surprise of 34.09% in the last reported quarter.
CNA Financial provides commercial property and casualty insurance products primarily in the United States. The company delivered positive surprise of 12.50% in the last reported quarter.
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