Here's Why You Must Buy W.R. Berkley (WRB) Stock Right Now
W.R. Berkley Corporation’s WRB higher premiums, lower claim frequency in certain lines of businesses and sufficient liquidity make it worth adding to one’s portfolio.
Growth Projections
The Zacks Consensus Estimate for W.R. Berkley’s 2023 earnings is pegged at $4.80 per share, indicating a 9.5% increase from the year-ago reported figure on 9.9% higher revenues of $12.05 billion. The consensus estimate for 2024 earnings is pegged at $5.77 per share, indicating a 20.2% increase from the year-ago reported figure on 7.3% higher revenues of $12.94 billion.
Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 0.2% and 0.5% north, respectively, in the past 30 days. This should instill investors' confidence in the stock.
Earnings Surprise History
WRB has a decent earnings surprise history. It surpassed earnings estimates in three of the last four quarters and missed in one, the average being 4.35%.
Zacks Rank & Price Performance
W.R. Berkley currently flaunts a Zacks Rank #1 (Strong Buy). In the past year, the stock has lost 1.9% against the industry’s rise of 14.3%.
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Style Score
W.R. Berkley has a VGM Score of B. The VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best opportunities in the value investing space.
Business Tailwinds
The Insurance business of W.R. Berkley is well-poised to grow, given higher premiums from other liability, short-tail lines, workers' compensation, commercial automobile and professional liability.
Higher premiums at casualty reinsurance, property reinsurance and monoline excess are likely to drive the performance of the Reinsurance & Monoline Excess segment. Underwriting income should gain from the compounding rate improvement above loss cost trends, along with growth in exposure and lower claims frequency in certain lines of business.
WRB is one of the largest commercial line property and casualty insurance providers. It has a solid balance sheet, with sufficient liquidity and robust cash flows that support growth initiatives and effective capital deployment.
Net investment income has witnessed a CAGR of 5.4% in the past eight years (2015-2022). The combination of a high-quality fixed maturity portfolio, along with solid operating cash flow, enabled the insurer to invest at higher interest rates in the first nine months of 2023. The metric should continue to improve as WRB also invests in alternative assets, such as private equity funds and direct real estate opportunities.
WRB has an impressive Value Score of B, reflecting an attractive valuation of the stock.
W.R. Berkley has a solid balance sheet with sufficient liquidity and strong cash flows, given its operational strength. A strong capital position enables the nation’s largest commercial line property casualty insurance provider to deploy capital via share repurchases, special dividends and dividend hikes that enhance shareholders' value.
In December 2023, the board approved a special cash dividend of 50 cents per share. This, along with two more special dividends paid out in January and October 2023, will bring the year’s total to $1.50 per share. Its dividend yield of 0.6% is higher than the industry average of 0.3%.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are RLI Corp. RLI, Kinsale Capital Group, Inc. KNSL and Cincinnati Financial Corporation CINF, each carrying a Zacks Rank #2 each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
RLI has a solid record of beating earnings estimates in three of the last four quarters and missing in one, the average being 145.76%. In the past year, RLI has gained 0.9%.
The Zacks Consensus Estimate for RLI’s 2023 and 2024 earnings per share is pegged at $4.80 and $5.56, indicating year-over-year increases of 2.3% and 15.8%, respectively.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last trailing four quarters, the average being 14.25%. In the past year, KNSL has gained 28.9%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings per share is pegged at $12.06 and $14.72, indicating year-over-year increases of 54.6% and 22%, respectively.
Cincinnati Financial has a solid record of beating earnings estimates in three of the last four quarters and missing in one, the average being 38.33%. In the past year, CINF has gained 1.6%.
The Zacks Consensus Estimate for CINF’s 2023 and 2024 earnings per share is pegged at $5.58 and $6.05, indicating year-over-year increases of 31.6% and 8.4%, respectively.
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RLI Corp. (RLI) : Free Stock Analysis Report
W.R. Berkley Corporation (WRB) : Free Stock Analysis Report
Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
