We are reiterating our Outperform recommendation on
The Chubb Corp.
), reflecting third quarter earnings beat, in which the company
threw a positive earnings surprise of 12%. Over the last four
quarters the company has delivered a positive earnings surprise
of 49.5%. Chubb carries a Zacks Rank #2 (Buy)
On Oct 24, Chubb reported third-quarter operating earnings of
$2.06 per share, way ahead of the Zacks Consensus Estimate of
$1.84 per share. Earnings also increased 4% year over year.
Chubb boosts of a diversified product profile and has a niche
market presence in the property and casualty industry.
Chubb's Commercial insurance segment has been consistently
reporting favorable earnings results. The segment has been
witnessing low-single-digits increase in average renewal rates
for the past several quarters. Retention ratio stands at a stable
Chubb's Personal Insurance segment is also witnessing a gradual
market improvement. The segment has been witnessing an increase
in net premium written from the past several quarters, led by
strong premium increases from international business
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 investors.
However, exposure to cat losses and low interest rate environment
are some of the headwinds.
Chubb has been also witnessing rising earnings estimates. Over
the last 60 days, the Zacks Consensus Estimate for 2013 moved up
by 5.2% to $7.95 as 13 of the 14 estimates moved north. The same
for 2014 rose 2.2% to $7.42 as 10 of 14 estimates were raised
over the same time frame. The expected long term earnings growth
Other Stocks to Consider
Cincinnati Financial Corp.
CNA Financial Corp.
) all carrying Zacks Rank #1 (Strong Buy) look attractive at
CHUBB CORP (CB): Free Stock Analysis Report
CINCINNATI FINL (CINF): Free Stock Analysis
CNA FINL CORP (CNA): Free Stock Analysis
ALLEGHANY CORP (Y): Free Stock Analysis
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