On Jul 3, Zacks Investment Research upgraded
W.R. Berkley Corporation
) to a Zacks Rank #1 (Strong Buy).
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Why the Upgrade?
W.R. Berkley delivered positive earnings surprises in 3 out of
the last 4 quarters with an average beat of 15.3%. The long-term
earnings growth of the company is presently pegged at 9.5%.
We expect the property and casualty insurer to surpass
expectations when it reports its second-quarter results on Jul
22. Our proven model shows that the property and casualty
insurer is likely to beat earnings because it has a right
combination of a positive Earnings ESP (Read: Zacks Earnings ESP:
A Better Method) and Zacks Rank #1. ESP or Expected
Surprise Prediction, which represents the difference between the
Most Accurate Estimate and the Zacks Consensus Estimate, is at
Additionally, for the second quarter, the Zacks Consensus
Estimate is pegged at 68 cents, up 4.4% year over year. The Zacks
Consensus Estimate for 2013 increased 0.3% to $2.89 per share
over the last 60 days, reflecting a year-over-year increase of
10.6%. The same for 2014 is pegged at $3.18, translating to a
10.3% year-over-year improvement.
W.R. Berkley is witnessing stable retention even with a general
rate hike for the past many quarters. It is also successful in
maintaining the trend of premium growth. The company's
investments in a number of start-ups over the last four years
have enabled it to capitalize on the improved market scenario.
Its International business is another area, which will fuel
long-term earnings growth.
Moreover, W.R. Berkley's strong operational performances support
its commitment to return value to its shareholders. In May, the
board approved an 11% dividend hike, representing a new
annualized rate of 40 cents per share and a yield of 0.96%.
Other Stocks to Consider
Apart from W.R. Berkley,
HCI Group, Inc.
Hilltop Holdings Inc
) are also worth considering. All these carry a Zacks Rank #1