On Mar 17, shares of Markel Corp.MKL hit a 52-week high of $768.39 driven by solid fourth-quarter 2014 results. With about 0.05 million shares exchanging hands in the last trading session, the stock closed at $767.06 per share, gaining 1.3%.
The one-year return from the stock came in at 30.7%, which was ahead of the S&P's return of 12.7%.
Strong Fourth-Quarter Results
Markel reported fourth-quarter net income of $8.05 per share, which surpassed the Zacks Consensus Estimate of $5.56 by 44.8%. Results also improved 15.8% year over year on the back of solid performance by the underwriting and investing operations.
Net premiums written increased 1% year over year to $811.6 million. The upside was driven by better results at the U.S. insurance segment.
Total operating revenue of the property and casualty insurer amounted to $1.3 billion, which was ahead of the Zacks Consensus Estimate of $1.1 billion by 18.2%. Moreover, the top line was up 4.4% year over year on account of higher premiums written and increased investment income.
Markel's combined ratio improved 700 basis points (bps) year over year to 89%. This was backed by improvement in the combined ratios at International Insurance and Reinsurance segments.
Markel remains focused on strengthening its balance sheet. As of Dec 31, 2014, the company had cash and cash equivalents of $18.6 billion, improving up 5.8% from the 2013-end level. Long-term debt declined 0.12% to $2.2 billion at year-end 2014. Book value per common share increased 14% to $543.96 at the end of 2014.
Markel, which currently holds a Zacks Rank #2 (Buy), has been witnessing upward revisions in estimates over the last 60 days. For 2015, the Zacks Consensus Estimate for earnings has moved north by 6.7% to $23.01 per share. The long-term growth is targeted at 10%.
Other Stocks to Consider
Other stocks worth considering in the same sector are Allied World Assurance Company Holdings, AG AWH , AmTrust Financial Services, Inc. AFSI and Arch Capital Group Ltd. ACGL . All of these stocks sport a Zacks Rank #1 (Strong Buy).
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