On June 25, Zacks Investment Research upgraded U.S. property and
The Chubb Corp.
) to Zacks Rank #2 (Buy).
Why the Upgrade?
Driven by a consistent strong operating performance reported by
Chubb over several quarters, the stock has seen an upward revision
in its earnings estimates. Over the last 60 days, the Zacks
Consensus Estimate for 2014 moved up 0.7% to $7.33. For 2015, the
Zacks Consensus Estimate moved up 0.5% to $7.80 per share over
the same time frame. The expected long-term earnings growth
Chubb enjoys competitive advantage within its specialty and upscale
personal insurance businesses. The company's niche market position
is reflected in its consistent earnings outperformance made evident
by positive surprises for 22 straight quarters, barring the last in
which the bottom line matched the Zacks Consensus Estimate.
Delving into the company's segments, Commercial Insurance has
consistently impressed with its earnings. The segment has been
witnessing a low single-digit increase in average renewal rates for
the past several quarters. Retention ratio stands at a stable
Chubb's Personal Insurance is also witnessing a gradual market
improvement. Net premium written in this segment has been
increasing over several quarters, led by strong premium increases
from international business.
The strength in Chubb's international business is in fact its
arsenal for its future growth.
Strong capital management witnessed by regular share repurchases
and continuous dividend increase over several years makes the stock
a favorite among investors. During the first quarter, the company
hiked its quarterly dividend by 13.6% to 50 cents per share. It was
Chubb's 32nd consecutive annual dividend increase.
Investors interested in property and casualty industry may look at
Endurance Specialty Holdings Ltd.
Federated National Holding Company
AmTrust Financial Services, Inc.
). All these stocks hold a Zacks Rank #1 (Strong Buy).
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