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Allstate Hits 52-Week High on Dividend Hike, Strong Earnings

Shares of The Allstate CorporationALL hit a 52-week high of $79.64, on recent dividend hike, strong fourth-quarter earnings, and the recent completion of the acquisition of Square Trade.

Allstate announced a 12% dividend hike to 37 cents per share.

The company's share price outperformed the Zacks categorized P&C Insurance industry by gaining 22.45% in 2016 compared with a gain of 21.99% for the industry. This reflects optimism over the stock from initiatives such as a profit improvement plan in its auto business, which was suffering from high auto claims since the past many quarters, efforts to diversify its business and product offering at a time when some of its business lines are facing friction.

Allstate came up with a stellar fourth quarter with earnings per share of $2.17 beating the Zacks Consensus Estimate by a whopping 34.8% and soaring 85% year over year on higher revenues.

Also, its top line exceeded the Zacks Consensus Estimate by 14.5%, andgrew 6.8% year over year. The upside was mainly driven by premium growth as well as a decent increase in net investment income.

The stock must also have received a boost from the recently acquired Square Trade that provides consumer protection plans across the U.S. It will also diversify the company's operations.

Investors favorably viewed the performance of the company's Property-Liability insurance line following the successful execution of the auto profit improvement plan across the three underwritten brands and continued outperformance by the Allstate brand homeowners and other personal lines insurance.

The company gave insights into 2017. It expects to grow its customer base with continued positive growth in Allstate Benefits and Esurance, rapid growth in its newly acquired consumer product protection plan business Square Trade and reduction in the number of policy losses under the Allstate and Encompass brands.

The company's plan to expand its different units also provided some clarity on its operations that suffered from an unfavorable backdrop over the last many quarters. The company's Allstate Agencies platform is being strengthened by rolling up the trusted advisor initiative. Esurance will continue to expand in auto and homeowners insurance. Allstate Benefits will continue to leverage its position in a high growth solitary benefits' market. Arity will expand the telematics business and Square Trade will continue to gain new retail partners.

Allstate carries a Zacks Rank #2 (Buy). Other insurers that hit 52-week high on the same day are Chubb Limited CB , Everest Re Group Inc. RE and Lincoln National Corp. LNC .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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