On Jan 3, 2015, Zacks Investment Research upgraded The Hartford Financial Services Group, Inc. (HIG) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
The Hartford has been witnessing rising earnings estimates on the back of a number of positive tidings at the company, which include enhancements in its defined contribution investment-only (DCIO) capabilities and improved earnings in the last reported quarter. The Zacks Consensus Estimate for 2014 increased 1.8% to $3.32 per share as two estimates were revised upward over the last 60 days. Over the same period, the Zacks Consensus Estimate for 2015 increased 0.3% to stand at $3.80 a share on upward estimate revisions.
Last quarter, Hartford Funds, a leading provider of mutual funds and 529 college savings plans, enhanced its DCIO capabilities by restructuring as well as increasing its team strength. Notably, Hartford Funds Distributors, LLC – a subsidiary of The Hartford – is the underwriter and distributor of Hartford Funds.
Moreover, the mutual fund provider introduced an R6 share class to 12 of its mutual funds. This addition is expected to provide flexibility in the retirement plan space thereby helping the company to serve the retirement planning market in a more competent manner.
Earlier, The Hartford reported third-quarter 2014 earnings that surpassed the Zacks Consensus Estimate and also rose year over year on improved Property and Casualty (P&C) results and higher income from limited partnerships and other alternative investments.
The Hartford divested its Japan annuity company, Hartford Life Insurance K.K. (HLIKK), in Jun 2014 that is expected to generate considerable capital benefit, which in turn will be utilized to enhance capital management. In fact, this also prompted The Hartford to increase its capital management plans for 2014–2015. This deal also led to an income tax benefit of $241 million in the first nine months of 2014.
All the aforementioned developments drove bullish sentiment on the stock and pulled up share prices by 6% over the last two months to close at $41.79 in the last trading session.
Other Stocks to Consider
Investors interested in the multiline insurance industry could also consider stocks like Ping An Insurance (Group) Company of China, Ltd. (PNGAY), Radian Group Inc. (RDN) and Assurant Inc. (AIZ). While Ping An Insurance and Radian Group have the same Zacks Rank as The Hartford, Assurant carries a Zacks Rank #2 (Buy).
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