On May 20, 2014, we issued an updated research report on
). The company reported first-quarter 2014 operating income of
$1.68 per share, handily beating the Zacks Consensus Estimate of
$1.56. Earnings per share were also up 24% on a year-over-year
basis. Strong performance at Assurant Solutions and Assurant
Employee Benefits along with a lower share count owing to share
repurchases boosted the quarter's results.
Assurant boasts a solid franchise, strong management team and
diversified product and geographic profile. We are also upbeat
about Assurant's Solutions division which has been performing well
over the past many quarters. With international as well as domestic
business improving, we expect top-line growth.
Management expects premium in its Specialty Property segment to
remain unchanged from 2013. While premium growth is expected to
result from the recent acquisition of StreetLinks, it will be
partly offset by a decline in premium from the company's
lender-placed insurance business. The bottom line could be affected
by a higher expense ratio as well as a higher loss ratio.
The Health line of Assurant's business is likely to witness
top-line growth on increased sales of new major medical policies.
The bottom line would, however, be restricted by a high effective
tax rate and higher sales commissions.
Likewise, the Employee Benefits business' top-line growth is
expected to increase on the back of growth in voluntary products.
Nonetheless, earnings are likely to be affected by continued
expense management and higher expenditure on generation of higher
Assurant follows a disciplined capital management strategy and has
always managed to keep up shareholders' confidence by actively
deploying capital though dividend payments and share buybacks. Last
week, the company announced an 8% increase in its quarterly
This Zacks Rank #3 (Hold) property and casualty insurer has been
witnessing an increase in earnings estimates ever since its
first-quarter earnings results. For 2014, the Zacks Consensus
Estimate has gone up 2.11% to $6.26 as 5 of 7 estimates moved
Other players under our coverage such as
Horace Mann Educators Corp.
Old Republic International Corporation
) with a Zacks Rank #1 (Strong Buy) and
) with a Zacks Rank #2 (Buy) are worth considering.
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