Here's Why Hold Strategy Is Apt for Assurant (AIZ) Stock Now
Assurant, Inc. AIZ has been gaining momentum on the back of organic growth across distribution channels, higher yields on fixed maturity securities, improved invested assets and a solid capital position.
Earnings Estimates
The Zacks Consensus Estimate for Assurant’s 2023 earnings is pegged at $12.58 per share, indicating a 13% increase from the year-ago reported figure on 4% higher revenues of $10.80 billion. The consensus estimate for 2024 earnings is pegged at $14.07 per share, indicating an 11.8% increase from the year-ago reported figure on 3.3% higher revenues of $11.16 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 13.2% and 1.5% north, respectively, in the past 60 days, reflecting analysts’ optimism.
Earnings Surprise History
Assurant has a decent surprise history, beating earnings estimates in six of the last seven quarters, while missed in one.
Zacks Rank
The company currently carries a Zacks Rank #3 (Hold). Year to date, shares of AIZ have gained 11% against the industry’s decline of 4.9%.
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Return on Equity
Assurant’s return on equity of 13.7% is better the industry average of 10.5% and improved 203 basis points year over year.
Style Score
AIZ has a VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
Continued organic growth across distribution channels, extended service contracts and mobile subscribers should fuel the growth of net earned premiums of Assurant in the long run.
Revenues from the Global Lifestyle segment increased 4% in the first half of 2023. AIZ’s Global Automotive, reflecting the prior-period sales of vehicle service contracts as well as higher net earned premiums fees and other income in Connected Living will continue to drive growth in this segment.
The International business is also expected to stabilize as the multi-line insurer is taking steps to grow its footprint through expansion and expense handling. The Global Automotive business is expected to show steady progress as AIZ materializes benefits from its partnership with CNH Industrial. Increasing the number of partnerships outside the United States will further boost its results.
The Global Housing segment will benefit from an increase in lender-placed policies in-force as well as higher average insured values and premium rates. In this segment, the business is expected to grow mid to high-single-digits in 2023 and 2024. Higher net earned premiums, fees and other income and net investment income are expected to drive the revenue growth.
Net investment income is expected to gain from higher yields on fixed maturity securities, cash and cash equivalents, and higher income from commercial mortgage loans on real estate due to improved invested assets.
Assurant has a strong capital management policy. Its solid capital position supports effective capital deployment. The multi-line insurer expects to deploy capital primarily to support business growth by funding investments, mergers and acquisitions and returning capital to shareholders in the form of share repurchases and dividends.
Stocks to Consider
Some better-ranked stocks from the multi-line insurance industry are Old Republic International Corporation ORI, Everest Group, Ltd. EG and Radian Group Inc. RDN. While Old Republic International sports a Zacks Rank #1 (Strong Buy), Everest Group and Radian Group carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Old Republic International’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 29.85%.
The Zacks Consensus Estimate for ORI’s 2023 and 2024 earnings has moved 8.3% and 5.2% north, respectively, in the past 60 days. Year to date, the insurer has gained 14.1%.
Everest Group’s earnings surpassed estimates in three of the last four quarters and missed in one, the average earnings surprise being 17.36%.
The Zacks Consensus Estimate for EG’s 2023 and 2024 earnings implies 72.7% and 24% year-over-year growth, respectively. Year to date, the insurer has gained 13.2%.
Radian’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 30.88%.
The Zacks Consensus Estimate for RDN’s 2023 and 2024 earnings has moved 5.7% and 4% north, respectively, in the past 60 days. Year to date, the insurer has gained 35.8%.
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Assurant, Inc. (AIZ) : Free Stock Analysis Report
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