Assurant Inc.’s (NYSE:AIZ) shares have surged 23.1% year to date, outperforming the industry's rise of 16.2% and the Zacks S&P 500 composite’s increase of 18%. With market capitalization of $6.8 billion, average volume of shares traded in the last three months was 0.6 million.
What’s Behind the Upside?
Assurant delivered positive earnings surprise in the last 10 quarters, reflecting operational excellence. It expects of 15% operating return on equity (ROE) by 2020.
The Zacks Rank #3 (Hold) global provider of risk management solutions in the housing and lifestyle markets has been pursuing strategic initiatives to expand its housing and lifestyle businesses through buyouts, ensuring a predictable and expanded earnings stream.
The top line at Global Lifestyle segment has been growing over the past several quarters and the company projects the same to be better than that of Connected Living and Global Automotive. The company expects at least 10% average annual growth in net operating income by 2021.
Pre-need is another important business for Solutions and remains a solid performer. The company expects 13% operating ROE by 2021 in Global Preeneed.
The company is realigning its business in Global Housing segment with an eye on higher returns. Assurant estimates net earnings growth in 2019 to be fueled by steady expansion of specialty property offerings. Operating ROE is expected to be 17-20% by 2021.
Assurant has a strong capital management policy, utilizing 50% of its free cash flow to repurchase shares besides increasing dividends each year. While its dividend has witnessed 5-year CAGR of 19% and yields 2.3%, the company has $739 million remaining under its current share buyback authorization. Assurant intends to return $1.35 billion capital through 2021.
Assurant has an impressive VGM Score of A. This style score analyzes the growth prospects of a company. It helps to identify stocks with the most attractive value, best growth, and most promising momentum.
The Zacks Consensus Estimate for 2019 and 2020 earnings indicates year-over-year improvement of 48.1% and 10.8%, respectively. Strong franchise, robust Solutions business, consistent cash flow generation, moderate debt ratio and disciplined capital management should poise the company well for long-term growth. Assurant has a favorable Growth Score of B. This style score identifies growth prospects of a company.
Stocks to Consider
Some top-ranked multi-line insurance stocks are American International Group, Inc. (NYSE:AIG) , Cigna Corporation (NYSE:CI) and Radian Group Inc. (NYSE:RDN) . Each of these stocks carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AIG provides insurance products for commercial, institutional, and individual customers in North America and internationally. The company delivered positive surprise of 47.66% in the last reported quarter.
Cigna provides insurance and related products and services in the United States and internationally. The company delivered positive surprise of 4.28% in the last reported quarter.
Radian Group engages in the mortgage and real estate services business in the United States. The company delivered positive surprise of 7.35% in the last reported quarter.
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