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Reasons to Hold Verisk Analytics (VRSK) in Your Portfolio

Shares of Verisk Analytics, Inc. VRSK have risen 5.3% year to date, outperforming the 0.5% growth of the industry it belongs to.

The company has an expected long-term (three to five years) EPS growth rate of 12.56%. Its earnings for 2024 and 2025 are anticipated to rise 14.4% and 11.5%, respectively, year over year.

Verisk Analytics, Inc. Price

Verisk Analytics, Inc. Price
Verisk Analytics, Inc. Price

Verisk Analytics, Inc. price | Verisk Analytics, Inc. Quote

Factors That Bode Well

VRSK drives growth through a robust strategy focused on organic expansion, product development and strategic acquisitions, achieving a 1% CAGR in revenues over the past five years. The company continues to invest in its workforce, data sets, analytic solutions, technology and complementary businesses to stay aligned with evolving market demands.

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Verisk focuses on deepening solution penetration with customers, developing new proprietary databases and predictive analytics and expanding into new customer sectors.

Acquisitions drive Verisk's growth strategy. The February 2023 acquisition of Mavera expanded its presence in Europe and supported global insurance growth. The acquisition of Krug in April 2023 extended its European claims and casualty services.

Moreover, the March 2022 purchase of Opta boosted its presence in Canada. Meanwhile, acquiring Automated Insurance Solutions enhanced claims processing automation and geographic reach. The 2022 acquisition of Infutor Data Solutions strengthened Verisk's marketing solutions across diverse industries, including insurance.

Verisk's current ratio (a measure of liquidity)at the end of the first quarter of 2024 was 1.09, higher than the preceding quarter's 1.05 and the year-ago quarter’s 0.89. A current ratio of more than 1 often indicates that the company will be easily paying off its short-term obligations.

Verisk consistently rewards its shareholders through dividends and share repurchases. The company paid $196.8 million, $195.2 million and $188.2 million as dividends and repurchased shares worth $2.8 billion, $1.7 billion and $475 million in 2023, 2022 and 2021, respectively. These actions demonstrate Verisk's commitment to shareholder value and confidence in its business.

Some Risks

VRSK's heavy reliance on data exposes it to operational risks, such as security breaches and contractual disputes with external suppliers. Moreover, the company's recent divestment from non-insurance segments sharpens its focus but raises concerns about overreliance on a single service offering, underscoring the importance of diversification for risk mitigation.

Zacks Rank and Stocks to Consider

VRSK currently carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the broader Zacks  Business Services sector are Aptiv APTV and Booz Allen Hamilton (BAH).

Aptiv currently sports a Zacks Rank #1 (Strong Buy). APTV has a long-term earnings growth expectation of 16.40%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in each of the last four quarters. The average beat is 12.18%. Shares of APTV have surged 17.1% in the past month.

Booz Allen Hamilton carries a Zacks Rank #2 (Buy) at present. BAH has a long-term earnings growth expectation of 12.60%.

The company delivered an earnings surprise of 12.66%, on average, surpassing the Zacks Consensus Estimate in three of the trailing four quarters and missing once. Shares of BAH have risen 6.5% in the past month.

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Booz Allen Hamilton Holding Corporation (BAH) : Free Stock Analysis Report

Verisk Analytics, Inc. (VRSK) : Free Stock Analysis Report

Aptiv PLC (APTV) : Free Stock Analysis Report

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Zacks Investment Research