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EMC Insurance Group: A Strong Buy

Zacks Equity Research

On Feb 22, Zacks Investment Research upgraded EMC Insurance Group Inc. (EMCI) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

EMC Insurance Group delivered a strong fourth-quarter performance with a positive earnings surprise of 32%. The company managed to post positive earnings surprise after three quarters.

Premiums earned improved 4.9%, while combined ratio improved 640 basis points year over year.

The long-term expected earnings growth rate for this stock is 5%.   The company expects to deliver operating earnings between $2.40 and $2.65 per share in 2013.

EMC Insurance Group reported its fourth-quarter results on Feb 20. Non-GAAP earnings per share came in at 99 cents, surpassing the Zacks Consensus Estimate by 32%. However, it lagged the year-ago number by 71%.

The upside was largely due to higher top line coupled with lower expenses.

The Zacks Consensus Estimate for 2013 is $2.50 per share as 1 estimate was revised higher over the last 7 days, pushing the Zacks Consensus Estimate by 35%. The current estimate is a few cents above the midpoint of the guidance range provided by EMC Insurance Group. For 2014, 1 estimate moved higher over the same time frame, lifting the Zacks Consensus Estimate by 10.3% to $3.22 per share.

Other Stocks to Consider

Property & casualty insurers Allied World Assurance Co Holding (AWH), Cincinnati Financial Corp. (CINF) and  Navigators Group Inc. (NAVG), among other, carry a Zacks Rank #1 (Strong Buy) and are worth noting.

Read the Full Research Report on EMCI

Read the Full Research Report on CINF

Read the Full Research Report on NAVG

Read the Full Research Report on AWH

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