Verisk Analytics, Inc. VRSK has had a decent run in the year-to-date period. The company’s shares have gained 18.1% compared with the 14.3% rally of its industry.
YTD Price Performance
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VRSK has reported impressive third-quarter 2024 results. Adjusted earnings (excluding 13 cents from non-recurring items) were $1.7 per share, surpassing the Zacks Consensus Estimate by 4.4% and growing 9.9% from the year-ago quarter. Total revenues of $725.3 million beat the consensus estimate marginally and increased 7% on a year-over-year basis.
How Is Verisk Analytics Doing?
Like any insurance company, VRSK’s profitability gains from direct premium growth. Growth in P&C insurers’ direct written premiums has been cyclical, with total industry premium growth falling from 14.8% in 2002 to a negative 3.1% in 2009. It did recover to 5.1% in 2019, even though the pandemic moderated this rise to 2.3% in 2020. Despite the challenges tackled during COVID, direct premium growth rose to 9.5% in 2021 and then to 9.7% in 2022 and 10.1% in 2023. We anticipate the trend will continue since there has been a remarkable recovery post pandemic, which will benefit Verisk Analytics.
Acquisitions play an important role in VRSK's growth strategy, as it continuously invests in global companies to improve its data and analytics capabilities. The April 2023 acquisition of Krug expanded the company's claims and casualty services across the European region. The acquisition of Mavera in February 2023 supported the company in expanding in the European region. It also helped in the continuous growth of the global insurance industry as a technology and analytics partner.
In March 2022, Opta was acquired, which extended its presence in the Canadian market, while the buyout of Automated Insurance Solutions strengthened VRSK’s automation capabilities in claims processing and supported geographical expansion. The 2022 acquisition of Infutor Data Solutions, LLC (Infutor) benefitted Verisk Analytics marketing solutions portfolio, enhancing it to cater to multiple industries, including insurance.
In 2023, Verisk paid $196.8 million as dividends and repurchased shares worth $2.8 billion. In 2022, Verisk paid $195.2 as dividends and repurchased shares worth $1.7 billion. In 2021, the company paid $188.2 million in dividends and repurchased shares worth $475 million. The continuous and steady rise in shareholder returns has the effect of propelling share prices, as investors increasingly seek returns in uncertain markets.
Verisk’s Zacks Rank & Other Stocks to Consider
VRSK carries a Zacks Rank #2 (Buy) at present.
Some other top-ranked stocks in the broader Zacks Business Services sector are Climb Global Solutions, Inc. CLMB and Evertec EVTC.
Climb Global Solutions flaunts a Zacks Rank of 1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CLMB has a long-term earnings growth expectation of 16%. It delivered a trailing four-quarter earnings surprise of 51.1%, on average.
Evertec carries a Zacks Rank of 2 at present. It has a long-term earnings growth expectation of 8.6%.
EVTC delivered a trailing four-quarter earnings surprise of 10.2%, on average.
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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.
