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Will Assurant (AIZ) Beat Estimates This Earnings Season?

We expect property and casualty insurer Assurant Inc.AIZ to beat expectations when it reports third-quarter 2015 results on Oct 27, after the market closes.

Why a Likely Positive Surprise?

Our proven model shows that Assurant has the right combination of the two key ingredients.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is +3.27%. This is because the Most Accurate estimate of $1.58 is higher than the Zacks Consensus Estimate of $1.53.

The positive ESP is a meaningful indicator of a likely positive earnings surprise for the company.

Zacks Rank: Assurant carries a Zacks Rank #3 (Hold). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating earnings.

The Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

What's Driving the Better-Than-Expected Earnings?

Assurant's bottom-line growth is likely to be driven by strong performances at Assurant Solutions and Assurant Specialty Property segments.

The growing mobile business of the company should lead to better fee income, which in turn, should boost top-line growth at Assurant Solutions. The segment acquired Lifestyle Services Group in 2013 and CWI Group in Oct 2014 to expand its global footprint in distribution. This increasing penetration is likely to have contributed to the top line. Also, expense reduction actions will help margin expansion.

Assurant Specialty Property segment is also anticipated to report impressive results as the third quarter witnessed not so active catastrophe environment.

The company continuously engages in share buybacks and the soon to be reported quarter was no exception either. The regular share repurchases should bolster bottom-line growth for the insurer.

The company delivered earnings surprise in three of the last four quarters greatly helped by 30.19% in the last reported quarter.

Stocks to Consider

Here are some companies from the insurance industry that you may want to consider as these have the right combination of elements to post an earnings beat this quarter:

Arch Capital Group Ltd. ACGL has an Earnings ESP of +4.26% and a Zacks Rank #2. The company is scheduled to report third-quarter earnings on Oct 28.

CBOE Holdings, Inc. CBOE has an Earnings ESP of +2.82% and a Zacks Rank #2. The company will release third-quarter earnings on Oct 30.

Cigna Corp. CI has an Earnings ESP of +1.38% and a Zacks Rank #3. The company is expected to report its third quarter 2015 earnings date on Nov 6.

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ASSURANT INC (AIZ): Free Stock Analysis Report

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CBOE HOLDINGS (CBOE): Free Stock Analysis Report

ARCH CAP GP LTD (ACGL): Free Stock Analysis Report

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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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