On Dec 28, Zacks Investment Research upgraded
Validus Holdings, Ltd
) to a Zacks Rank #1 (Strong Buy).
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Why the Upgrade?
Validus has witnessed rising earnings estimates on the back of
solid earnings results. Moreover, this insurance broker delivered
positive earnings surprises in the last 4 quarters with an
average beat of 24.2%. To return value to its shareholders, the
company increased the share repurchase authorization to $500
million. The long-term expected earnings growth rate for this
stock is 14.9%.
In the last reported quarter, Validus's non-GAAP earnings per
share came in at $1.56, surpassing the Zacks Consensus Estimate
by 21%. An improvement in top line, driven by higher net premiums
earned, aided the outperformance.
Underwriting income of Validus increased 16.5% year over year
with combined ratio improving 300 basis points.
With regard to enhancing shareholder value, the board of
directors of Validus approved an increase in share repurchase
authorization to $500 million. The company spent $1.58 billion to
buy back 53.4 million shares since the inception of the share
repurchase program. It is hence left with $483.1 million
remaining under its authorization.
Its dividend yield of 3.04% betters the industry average of
2.95%, as well as that of some other insurance brokers like
Marsh & McLennan Companies, Inc.
) with a yield of 2.07%, and
Willis Group Holdings Public Ltd Co.
) with a yield of 2.51%.
The Zacks Consensus Estimate for 2013 increased 0.4% to $5.84 per
share over the last 30 days. The estimate translates to a
year-over-year increase of 79.1%. For 2014, the same rose by 1.3%
to $5.28 per share over the same time frame.
Another Stock to Consider
Another insurance broker worth considering is
), carrying a Zacks Rank #2 (Buy).