On Jan 8, Zacks Investment Research upgraded Assurant Inc. (AIZ) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Assurant has been witnessing increasing earnings estimates following restructuring efforts, strong scores from a rating agency and solid operational performance.
Assurant has been focusing on realigning its Specialty Property business, which has been performing strongly on the strength of high placement rates and market share from lenders’ consolidation. Assurant Specialty Property recently divested its subsidiary American Reliable Insurance Company. It intends to deploy the sale proceeds in high growth return business. Earlier, it added Field Asset Services, a company specializing in service related to property preservation, restoration and inspection, to its portfolio, enhancing its services.
Assurant also scores strongly with the credit rating agencies. A.M. Best affirmed the issuer credit ratings (ICR) of Assurant as well as ICR and financial strength ratings of its U.S. property/casualty and life/health subsidiaries. The ratings carry a stable outlook.
With respect to the earnings trend, this multi-line insurer delivered a positive surprise in each of the trailing four quarters with an average beat of 7.37%. In the last reported quarter, Assurant posted earnings of $1.82 that surpassed the Zacks Consensus Estimate by 15.19% and year-ago figure by 6.4%. Solid performance at the Assurant Solutions and Employee Benefits segments drove the outperformance.
These positives resulted in an upward revision in the Zacks Consensus Estimate for 2014 and 2015 over the last 60 days. The same moved up 0.4% to $6.70 for 2014 and by a penny to $6.59 for 2015. The expected long-term earnings growth rate for the stock is 7%.
Other Stocks to Consider
Investors interested in multi-line insurers can also consider CNO Financial Group, Inc. (CNO), The Hartford Financial Services Group, Inc. (HIG) and Ping An Insurance (Group) Company of China, Ltd. (PNGAY). All these carry the same Zacks Rank as Assurant.
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