On Dec 26, 2013, shares of
) hit a 52-week high of $66.73.
The momentum was driven by continued outperformance, improved
outlook, new share repurchase authorization and strong credit
Assurant delivered positive earnings surprises in three of the
last four quarters with an average beat of 32.9%. In the last
reported quarter, this multiline insurer posted impressive
results with a positive earnings surprise of 17.9%. Earnings also
fared well year over year. Assurant's better-than-expected
results were driven by strong performance by Assurant Specialty
Property. A lower share count due to share repurchases also
boosted the bottom line.
For 2013, management expects its Specialty line of business to
benefit from growth in multi-housing loans, higher volume in
lender-placed loan portfolios, and discontinuation of a client
quota-share arrangement. Its Solutions line is likely to
experience higher top-line growth from increases in domestic as
well as international businesses. In the fourth quarter, the
segment is expected to report about $50 million of net operating
income and a 14% annualized operating ROE.
With respect to returning value to shareholders, the board of
directors of Assurant approved an increase of $600 million of
share buyback. The company spent $351 million to buy back 7
million shares from the beginning of 2013 through October.
Assurant was left with $152 million for repurchases as of Oct 31,
In addition, A.M. Best Co. affirmed Assurant's issuer credit
ratings (ICR) at 'bbb'. The outlook on the ratings was pulled up
to positive from stable. The rating agency concurrently affirmed
the financial strength rating (FSR) of A (Excellent) and ICRs of
the property/casualty subsidiaries of Assurant and FSRs of A-
(Excellent) and ICRs of "a-"of Assurant's life/health
Valuation for Assurant looks attractive. The shares are trading
at a discount to the peer group average on a forward
price-to-earnings basis while return on equity is higher than the
peer group average. In addition, year-to-date return from the
stock was 91.0%, much above the S&P's return of 29.2%.
Assurant presently carries a Zacks Rank #3 (Hold). Better-ranked
stocks worth considering in the insurance sector include
CNO Financial Group, Inc.
). All these stocks sport a Zacks Rank #1 (Strong Buy).
ASSURANT INC (AIZ): Free Stock Analysis
CNO FINL GRP (CNO): Free Stock Analysis
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