Should You Retain Markel (MKL) Stock in Your Portfolio?
Markel Group Inc.’s MKL niche focus, improved pricing, effective risk management, strategic buyouts, solid capital position and prudent capital deployment make it worth retaining in one’s portfolio.
Growth Projections
The Zacks Consensus Estimate for Markel’s 2023 earnings is pegged at $80.27 per share, indicating a 19.8% increase from the year-ago reported figure on 10.1% higher revenues of $14.61 billion.
The consensus estimate for 2024 earnings is pegged at $93.78 per share, indicating a 16.8% increase from the year-ago reported figure on 7.1% higher revenues of $15.66 billion.
Zacks Rank & Price Performance
Markel currently carries a Zacks Rank #3 (Hold). The stock has gained 9.2% against the industry’s decrease of 7.3% in the past year.
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Return on Equity (ROE)
Markel’s trailing 12-month return on equity was 8.7%, up 230 basis points year over year. ROE reflects its efficiency in using its shareholders’ funds.
Style Score
Markel has a favorable VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Business Tailwinds
MKL has been generating improved premiums. An improvement in new business volume, strong retention levels, continued increases in rates and expanded product offerings should help the insurer retain the momentum.
Markel aims to double the size of its insurance operations and thus targets $10 billion of annual insurance premiums in five years. This should lead to $1 billion of annual underwriting profit. MKL envisions to achieve this target, primarily banking on organic growth of its existing operations.
Investment income benefits from an improving rate environment. Thus, Markel’s fixed maturity portfolio is poised to gain, given higher yield rates. The company believes that the impact will become more meaningful in the future as lower-yielding securities mature and are replaced by higher-yielding securities.
Through Markel Ventures, MKL has been investing in the ownership of the best asset management firms. The company has been pursuing acquisitions to achieve profitable growth in insurance operations and to create additional value on a diversified basis in Markel Ventures operations.
Banking on a strong capital position, Markel has engaged in share buybacks.
The company has a share repurchase program, authorized by the board, that provides for the repurchase of up to $750 million of shares.
Stocks to Consider
Some better-ranked stocks from the Diversified Operations industry are General Electric Company GE, ITT Inc. ITT and 3M Company MMM, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for General Electric’s 2023 and 2024 earnings indicates a year-over-year increase of 1.1% and 68.9%, respectively. GE delivered a four-quarter average earnings surprise of 53.42%.
The consensus estimate for 2023 and 2024 earnings has moved up by 15.7% and 4.7% in the past 60 days. Shares of GE have gained 44.7% in the past year.
The Zacks Consensus Estimate for ITT’s 2023 and 2024 earnings indicates a year-over-year increase of 17.1% and 11.4%, respectively. ITT delivered a four-quarter average earnings surprise of 7.99%.
The consensus estimate for 2023 and 2024 earnings has moved up by 1.9% and 1.7%, respectively, in the past 30 days. Shares of ITT have gained 33.2% in the past year.
The Zacks Consensus Estimate for 3M Company’s 2024 earnings indicates a year-over-year increase of 8.7%. MMM beat estimates in three of the last four quarters and missed in one, the average being 16.66%.
The consensus estimate for 2023 and 2024 earnings has moved up 1.9% and 1.8% in the past 60 days. Shares of MMM have lost 19.9% in the past year.
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