Chubb Corp Hits 52-Week High: Was a Strong Q3 the Driver?

On Nov 4, The Chubb Corp. (CB) touched a 52-week high of $99.90. The rise in the stock was propelled by strong third-quarter earnings which outpaced the Zacks Consensus Estimate by 11.3%. About 1.1 million shares exchanged hand in the last session.

Growth Drivers

Chubb’s strong third-quarter financial performance was a continuation of superior results and attractive revenue and earnings growth.

The company’s operating income of $2.17 per share surpassed the Zacks Consensus Estimate of $1.95 and improved 5% year over year.

The insurer’s net written premium grew by 5% year over year to $3.2 billion. While the company registered a 5% rise in premium from its U.S. business, 4% premium growth was seen at its international business.

Book value per share, which is a measure of company’s net worth also grew almost 8.0% year over year to $70.0.

Investors’ confidence in the stock also stems from Chubb's upward revision of its 2014 earnings guidance, after it was trimmed in the second quarter. Operating income is now projected in the range of $7.35 to $7.45 per share, considerably higher than the earlier projection of $6.75 to $6.95.

Also, Chubb’s strong capital management featured by regular share repurchases and continuous dividend increase over several years makes the stock a favorite among investors.

Estimate Revision Shows Strength

Driven by optimism surrounding the stock, over the last 30 days, the Zacks Consensus Estimate for 2014 earnings per share climbed 5.8% to $7.45.

Chubb carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Other players worth considering are industry include AmTrust Financial Services, Inc. (AFSI), HCI Group, Inc. (HCI), and China White Mountains Insurance Group, Ltd. (WTM)). All these stocks carry a Zacks Rank #1 (Strong Buy).