We reiterate our Neutral recommendation on
) following third quarter earnings. Though the company reported
better-than-expected results and delivered a positive surprise of
18%, weakness in the company's specialty property, employee
benefits as well as health business keeps us on the
On Oct 24, 2013, Assurant reported third quarter earnings of
$1.71 per share, significantly ahead of the Zacks Consensus
Estimate of $1.45 per share. Earnings also increased 10.3% year
over year. Assurant's better-than-expected results were driven by
strong performance by its Specialty Property segment. A lower
share count due to share repurchases also boosted the bottom-line
The company witnessed rising earnings estimates following
third quarter earnings release. Over the past 30 days the Zacks
Consensus Estimate for 2013 went up by 4.1% to $6.08 as 10 of 11
estimates moved up. The same for 2014 was up by 1.8% to $6.15 per
share as 4 of 11 estimated were revised upward.
From an operational view point, Assurant boasts of a solid
franchise, strong management team and diversified product and
We are also upbeat about Assurant's Solutions division. This
division has been performing well over the past many quarters.
With international as well as domestic business improving, we
expect top line earnings growth.
On the tepid side, Employee Benefits segment has been
pressured by persistent economic challenges in the small group
sector leading to higher lapse rates and lower premium growth on
We are also concerned about the long term performance at
Specialty Property where expected regulator mandated price
reductions and declining placement rates will pressurize
Another segment of Assurant - Health insurance, had been
underperforming for the past several quarters due to the
Nevertheless, this Zacks Rank#2 (Buy) stock's strong balance
sheet with disciplined capital management will continue to aid
its solid results.
Other stocks to consider
Other players from the same industry -
Eastern Insurance Holdings, Inc.
FBL Financial Group Inc.
) all with Zacks Rank #2 (Buy) are worth considering.
ASSURANT INC (AIZ): Free Stock Analysis
EASTERN INSURNC (EIHI): Free Stock Analysis
FBL FINL GRP-A (FFG): Free Stock Analysis
KEMPER CORP (KMPR): Free Stock Analysis
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