Yahoo Finance Here's Why You Should Add Kinsale Capital (KNSL) to Your Kitty
Kinsale Capital Group, Inc. KNSL has been in investors' good books on the back of rate increases, higher premium growth rate and lower reinstatement premiums and prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for Kinsale Capital’s 2023 earnings is pegged at $9.86, indicating a 26.4% increase from the year-ago reported figure on 32.2% higher revenues of $1.08 billion.
The consensus estimate for 2024 earnings is pegged at $11.85, indicating a 20.2% increase from the year-ago reported figure on 19.6% higher revenues of $1.30 billion.
Northbound Estimate Revision
The Zacks Consensus Estimate for 2023 and 2024 has moved 9.8% and 8.7% north, respectively, in the past 60 days, reflecting analysts’ optimism.
Earnings Surprise History
Kinsale Capital has a solid earnings surprise history. It beat estimates in each of the last four quarters, the average being 13.83%.
Zacks Rank & Price Performance
Shares of this Zacks Rank #1 (Strong Buy) property and casualty insurer have gained 29.2% in a year against the industry’s decline of 9.2%. We expect the company’s policy to ramp up its growth profile and capital position and drive shares higher.
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Return on Equity (ROE)
Kinsale Capital’s operating ROE of 27.1% expanded 650 basis points (bps) year over year in 2022 and remained above the industry’s ROE of 6.7%. Annualized operating ROE expanded 420 bps year over year to 25% in 2022.
Growth in the business from favorable market conditions, rate increases and a decrease in average stockholders' equity are likely to boost the operating return on equity.
Business Tailwinds
Kinsale Capital’s premium income is expected to improve in the near term on the back of higher submission activity from brokers and higher rates across most lines of business, resulting from continued favorable conditions in the E&S market.
The combination of highly controlled underwriting combined with advanced technology-driven low costs and a focus on the Excess and Surplus Lines Insurance market is driving the profitability and growth of Kinsale Capital.
The Excess and Surplus Lines insurance segment continues to witness rapid growth owing to dislocation in the overall property and casualty market.
Combination of premium growth and favorable rate increases from a strong underwriting environment and lower levels of operating expenses relative to premium growth and management's cost control efforts are expected to drive the underwriting income of the insurer.
The expense ratio is expected to gain from lower net commissions incurred and lower other underwriting expenses as a percentage of earned premiums, economies of scale from premium expansion and management's continued focus on controlling costs.
Strong cash flows enable Kinsale Capital to engage in shareholder-friendly moves like dividend hikes. Banking on solid cash flow, KNSL has increased dividend since 2017 at an eight-year CAGR (2016-2023) of 13.7%.
Kinsale Capital has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company. Back-tested results have shown that stocks with a favorable Growth Score when combined with a solid Zacks Rank offer better returns.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are CNA Financial Corporation CNA, Everest Re Group, Ltd. RE and Selective Insurance Group, Inc. SIGI, each sporting a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CNA Financial beat estimates in two of the last four quarters and missed in the other two, the average being 9.91%. The Zacks Consensus Estimate for 2023 and 2024 has moved 3.9% and 14.3% north, respectively, in the past 60 days.
The Zacks Consensus Estimate for CNA Financial’ 2023 and 2024 earnings per share is pegged at $4.24 and $4.39, indicating a year-over-year increase of 10.4% and 3.5%, respectively. In the past year, CNA has lost 19%.
Everest Re beat estimates in each of the last four quarters, the average being 18.41%.
The Zacks Consensus Estimate for RE’s 2023 and 2024 earnings per share is pegged at $45.63 and $53.02, indicating a year-over-year increase of 68.5% and 16.1%, respectively. In the past year, RE has gained 20.5%.
The Zacks Consensus Estimate for Selective Insurance’s 2023 and 2024 earnings per share is pegged at $6.57 and $7.55, indicating a year-over-year increase of 30.6% and 14.9%, respectively. In the past year, SIGI has gained 7.6%.
The Zacks Consensus Estimate for SIGI’s 2023 and 2024 earnings has moved 9.8% and 9.7% north, respectively, in the past 60 days.
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Everest Re Group, Ltd. (RE) : Free Stock Analysis Report
CNA Financial Corporation (CNA) : Free Stock Analysis Report
Selective Insurance Group, Inc. (SIGI) : Free Stock Analysis Report
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
