On Mar 15, we upgraded
XL Group plc
) to Outperform based on its strong fourth-quarter performance
and continued efforts to enhance shareholder value. This property
and casualty insurer presently carries a Zacks Rank #1 (Strong
Why the Upgrade?
XL Group's fourth-quarter 2012 earnings came in at 13 cents, well
above the Zacks Consensus Estimate of a loss of 35 cents per
share. Revenues increased 1.9% from the year-ago period to $89.5
million, easily surpassing the Zacks Consensus Estimate of $1.7
billion. Over the past four quarters, XL Group has delivered an
average surprise of 54.2%.
XL Group witnessed upward estimate revisions following its
earnings release. The Zacks Consensus Estimate for 2013 inched up
4.1% to $2.54 as 4 of 16 estimates were revised higher over the
last 30 days.
Why the strong positive bias on the company? With a strong
international exposure and a diversified suite of product
offering, we believe that the company is well positioned to write
higher premiums fueling top-line growth, going forward.
The board of directors approved a $850 million share repurchase
program along with a 27% hike in its quarterly dividend, which
will further boost the bottom line.
The long-term expected earnings growth rate for this stock is
Other Stocks to Consider
Apart from XL Group, other stocks in the property and casualty
sector that are currently performing well include
Arch Capital Group Ltd
Cincinnati Financial Corp
EMC Insurance Group Inc
). All these companies carry a Zacks Rank #1 (Strong Buy).
ARCH CAP GP LTD (ACGL): Free Stock Analysis
CINCINNATI FINL (CINF): Free Stock Analysis
EMC INSURANCE (EMCI): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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