On Jan 8, Zacks Investment Research upgraded Federated National Holding Company (FNHC) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Federated National has been witnessing increasing earnings estimates following an effective capital deployment and solid operational performance.
In its concerted effort to share more profits with shareholders, the company’s board of directors approved a 33.3% hike in the quarterly dividend. Its dividend of 4 cents currently yields 0.6%. An increase in dividend payout testifies to the company’s operational strength and liquidity. In addition, this strengthens investors’ confidence in the stock as well as attracts new investors.
With respect to the earnings trend, this property and casualty insurer delivered a positive surprise in each of the last four quarters, with an average beat of 80.21%. In the last reported quarter, Federated National posted earnings of 56 cents per share that outperformed the Zacks Consensus Estimate by 80.65% and improved 44% year over year. Higher revenues – driven by increases in premiums, investment income, commission income, finance revenue, policy fees –drove the upside.
These positives resulted in an upward revision of 1.8% in the Zacks Consensus Estimate for 2015 to $2.23 in the last 90 days. The expected long-term earnings growth rate for the stock is 20%.
Other Stocks to Consider
Investors interested in multi-line insurers can also consider The Allstate Corporation (ALL), W.R. Berkley Corporation (WRB) and Everest Re Group Ltd. (RE). All these carry the same Zacks Rank as Federated National.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment