On May 9, 2014, we issued an updated research report on
Improved top line courtesy of higher premiums and investment income
helped RLI Corp. outperform the Zacks Consensus Estimate on
earnings by 5.6% and year-ago quarter's earnings by 9.6%. With
this, RLI Corporation delivered four straight quarters of positive
RLI Corp. is one of the most profitable property and casualty
writers, having generated underwriting profits in 34 of the last 38
years, and consecutively in the last 18 years. A strong local
branch office network, broad range of product offerings, and focus
on specialty insurance lines also serve as contributors to the
RLI Corp. remains committed to enhance its shareholders' value.
With the recent hike of 5.9% in quarterly dividend, RLI Corp. has
hiked dividends over the past 39 years. Over the last 5 years, the
company has returned more than $600 million to shareholders in the
form of share buybacks and dividends. The company has $87.5 million
remaining under its authorization.
However, the company has been experiencing increasing expenses. Due
to higher debt levels, cost of debt is also increasing. Also,
exposure to catastrophe events always remains a headwind for
property and casualty insurers. In addition, given the soft
interest rate environment, we do not expect much turnaround in net
With respect to estimate revisions, this Zacks Rank #3 (Hold) stock
has witnessed a positive movement as most of the estimates were
revised higher. For 2014, the Zacks Consensus Estimate moved north
by 2.1% to $2.41 per share and for 2015, the same moved up 1.3% to
$2.37 over the last 30 days.
Other Stocks to Consider
Some other stocks worth mentioning in the property and casualty
insurance industry are
Allied World Assurance Company Holdings, AG
AmTrust Financial Services, Inc
Aspen Insurance Holdings Ltd
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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AMTRUST FIN SVC (AFSI): Free Stock Analysis
ASPEN INS HLDGS (AHL): Free Stock Analysis
ALLIED WORLD AS (AWH): Free Stock Analysis
RLI CORP (RLI): Free Stock Analysis Report
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