We retain our Outperform recommendation on
AXIS Capital Holdings Ltd
) following its fourth-quarter results, where loss per share was
narrower than the Zacks Consensus Estimate. The company also has
a new share buyback program in its kitty. This property and
casualty insurer presently carries a Zacks Rank #2 (Buy).
AXIS Capital's fourth-quarter 2012 operating loss of 23 cents per
share was narrower than the Zacks Consensus Estimate of a loss of
Following the release of the fourth-quarter results, the Zacks
Consensus Estimate for 2013 has gone up 3.6% to $4.05 per share
as 7 of 12 estimates moved north. Moreover, the Zacks Consensus
Estimate for 2014 has also increased 4% to $4.15 per share as 5
of 11 estimates were raised.
New business opportunities across AXIS Capital's lines of
business and geography have helped the company achieve growth in
premium writings. The Insurance sector in particular, continues
to drive solid numbers. AXIS Capital expects gross premiums
written to increase in 2013, given favorable pricing momentum
sustains in the primary insurance market.
AXIS remains strongly capitalized. Its financial flexibility
remains very strong, with a debt-to-total capital ratio of 14.7%.
AXIS Capital is maintaining the trend of boosting shareholder
value through share buybacks and dividend hikes. The approval of
a dividend hike of 4% in Dec 2012 marked the 9th consecutive year
of dividend increase. The board also approved a $750 million
share buyback program.
We believe that conservative underwriting practices will help the
company remain well capitalized. New business generation and
platform expansion will also aid the company fuel its top-line
Other Stocks to Consider
Among other property and casualty insurers, stocks like
Cincinnati Financial Corp
XL Group plc
EMC Insurance Group Inc.
) presently carry a Zacks Rank #1 (Strong Buy) and are worth
AXIS CAP HLDGS (AXS): Free Stock Analysis
CINCINNATI FINL (CINF): Free Stock Analysis
EMC INSURANCE (EMCI): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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