Shares of Markel CorporationMKL have outperformed the Zacks categorized Property and Casualty Insurance industry, year to date. Shares gained 5.20% compared with 3.00% increase by the industry. Though the company did not witness any earnings momentum for 2017, estimates for 2018 moved 5.5% higher to $26.64.
The Zacks Rank #3 (Hold) insurer's investment result has improved over the years despite the interest rate remaining low. The company continues to replace lower yielding fixed maturity corporate and mortgage-backed securities with higher yielding fixed maturity tax-exempt municipal securities. The Fed's decision of increasing interest rate, albeit small, raise further optimism about the company's prospects.
Also, the company has been issuing debts amid the low interest rate environment and effectively lowering its interest burden.
Markel's operational result is primarily driven by insurance, investments and Markel ventures. Moreover, its inorganic story - backed by strategic buyouts - adds to the upside. Last month, Markel agreed to buy SureTec for $250 million to enhance its surety capabilities. We note that the company has been pursuing acquisitions to boost growth in insurance operations and create additional value, on a diversified basis, in Markel Ventures operations.
Markel's effective insurance risk management and focus on developing and maintaining underwriting and pricing guidelines on existing products as well as new product development are encouraging. Hence, we expect its underwriting profit, a key measure of underwriting performance for insurers, to improve.
Markel also effectively deploys capital to enhance shareholders' value. The company currently has a $300 million share buyback authorization.
Stocks to Consider
Some better-ranked stocks from the insurance industry are American Financial Group, Inc. AFG , Selective Insurance Group, Inc. SIGI and The Progressive Corporation PGR . Each of these stocks flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
American Financial Group engages primarily in property and casualty (P&C) insurance with focus on specialized commercial products for businesses. Shares of the company gained 5.99% year to date.
Selective Insurance provides insurance products and services in the U.S. Its shares rallied 8.83% year to date.
Progressive offers personal and commercial P&C insurance, and other specialty P&C insurance and related services, primarily in the U.S. Shares of the company gained 11.32% year to date.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017? Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report