Yahoo Finance Reasons Why Chubb Limited (CB) Stock is an Attractive Pick Now
Chubb Limited CB is well-poised for growth, driven by rate increases, higher new business, strong renewal retentions and effective capital deployment.
Growth Projections
The Zacks Consensus Estimate for Chubb’s 2022 and 2023 earnings per share is pegged at $15.7 and $17.1, indicating year-over-year increases of 25.4% and 8.8%, respectively.
Northbound Estimate Revision
The Zacks Consensus Estimate for Chubb’s 2022 and 2023 earnings has moved 6.1% and 3.4% north, respectively in the past 30 days. This should instill investors' confidence in the stock.
Earnings Surprise History
Chubb has a decent earnings surprise history. It has a solid track record of beating earnings estimates in each of the last seven quarters.
Zacks Rank & Price Performance
Chubb currently carries a Zacks Rank #2 (Buy). In the past year, the stock has rallied 8.4% against the industry’s decrease of 1.1%.
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Style Score
Chubb has a favorable VGM Score of B. VGM Score helps to identify stocks with the most attractive value, best growth and the most promising momentum.
Back-tested results show that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best opportunities.
Business Tailwinds
Riding on solid commercial businesses, expanding underwriting margins, higher new business, positive rate increases and strong renewal retention, Chubb expects the robust premium revenue growth to continue in the long run. The level of rate increases has remained robust and well in excess of loss costs. Chubb expects this trend to continue in the future.
Riding on rising interest rates and widening spreads, investment income is expected to continue to rise. Chubb anticipates adjusted net investment income over the next quarter to be in the range of $980 million to $1 billion.
Chubb has always considered acquisitions as an effective strategy for inorganic growth and global expansion. Through acquisitions, CB has expanded its international and domestic footprint and built a superior portfolio of products and services.
In July 2022, Chubb acquired the life and non-life insurance companies of Cigna across six of Asia Pacific’s markets. With this buyout, Chubb’s Asia-Pacific portfolio will increase to $7 billion in premiums. Chubb's global A&H writings will increase to nearly $6 billion in premium, while CB's life insurance segment will become a $5.4 billion business.
Chubb’s financial position remained strong, with $ 68 billion in total capital. The insurer continues to remain liquid with cash and short-term investments of $10.6 billion at the second quarter end.
Chubb has increased dividends at an eight-year CAGR (2015-2022) of 4.8%. The dividend yield is 1.6%, better than the industry average of 0.4%, making the stock an attractive pick for yield-seeking investors. At present, $2.5 billion in share repurchase authorization remained through June 30, 2023.
Other Stocks to Consider
Some other top-ranked stocks from the property and casualty insurance industry are Arch Capital Group Ltd. ACGL, American Financial Group, Inc. AFG and ProAssurance Corporation PRA, each sporting a Zacks Rank #1 (strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Arch Capital surpassed earnings estimates in three of the last four quarters and missed in one, the average being 33.64%. In the past year, the insurer has rallied 14.1%.
The Zacks Consensus Estimate for Arch Capital’s 2022 and 2023 earnings has moved 5.7% and 4.9% north, respectively, in the past 30 days.
American Financial’s earnings surpassed estimates in each of the last four quarters, the average beat being 37.09%. In the past year, American Financial has gained 1.5%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 2.2% and 3.3% north, respectively, in the past seven days.
The bottom line of ProAssurance surpassed earnings estimates in three of the last four quarters and missed in one, the average being 150.9%. In the past year, the insurer has lost 5.5%.
The Zacks Consensus Estimate for ProAssurance’s 2022 and 2023 earnings has moved 16.9% and 13.9% north, respectively, in the past seven days.
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Chubb Limited (CB) : Free Stock Analysis Report
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