We are reiterating our Outperform recommendation on the shares
The Chubb Corp.
), following the solid second quarter earnings results, which
included a 28% positive earnings surprise. Over the past four
quarters, this property and casualty insurer delivered positive
surprise with an average beat of 54%. Chubb carries a Zacks Rank
Why a Reiteration?
On Jul 25, Chubb reported second-quarter operating earnings of
$1.77 per share, significantly ahead of the Zacks Consensus
Estimate of $1.38 per share. Earnings also increased 29% year
over year. The earnings increase came on the back of higher
premium which was up across all the business segments.
Chubb has been witnessing rising earnings estimates. Over the
last 30 days, the Zacks Consensus Estimate for 2013 moved up by
7.7% to $7.42 as all the estimates moved north. The same for 2014
rose 3.7% to $7.26 as 12 of 16 estimates were raised over the
same time frame. The expected long term earnings growth is
Chubb is continuously witnessing improving business conditions
in Commercial and Personal lines insurance business. It is
experiencing a favorable rate increase along with a stable
Chubb's international business is also performing strongly and
is an arsenal to its future growth.
Strong capital management witnessed by regular share
repurchases and a continuous dividend increase for the past
several years makes the stock a favorite among
However, exposure to cat losses and low interest rate
environment are some of the headwinds.
Other Stocks to Consider
Everest Re Group Inc.
State Auto Financial Corp.
) carrying Zacks Rank #1 (Strong Buy), look impressive.
CHUBB CORP (CB): Free Stock Analysis Report
EVEREST RE LTD (RE): Free Stock Analysis
STATE AUTO FINL (STFC): Free Stock Analysis
ALLEGHANY CORP (Y): Free Stock Analysis
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