7 Reasons Why You Should Add Markel (MKL) To Your Portfolio

Estimates for Markel Corporation (NYSE:MKL) have been revised upward over the past 60 days, reflecting analysts’ confidence in the stock. The stock has seen the Zacks Consensus Estimate for 2018 and 2019 earnings being raised 10.8% and 1.9% to $38.48 and $38.93, respectively.

Markel is a property and casualty (P&C) insurer, which markets and underwrites specialty insurance products in the United States and internationally. Shares of this Zacks Rank #1 (Strong Buy) P&C insurer have rallied 14.9% in a year’s time, outperforming the industry’s growth of 8.4%.

Let’s focus on the factors that make Markel a stock to invest in for greater returns to your portfolio.

Improving Premiums: Given the consistent solid performance by its segments — U.S. Insurance, International Insurance and Reinsurance — Markel has been able to grow its premium by about 14.6% over the last five years.

Better Investment Results: Investment income, a major contributor to insurers’ top line, has been improving over the past few years owing to rising interest rates. The P&C insurer anticipates witnessing better investment results in the near term backed by a slow but steady improving pace of interest rates.

Top-Line Growth: On the back of improving investment income and premium growth, the company has been witnessing an upward trend pertaining to its top line. We expect the company to continue displaying this momentum in the near term, which in turn, is likely to accelerate its overall growth.

Inorganic Growth: Markel has been ramping up its growth through strategic acquisitions, which not only have helped boosting the P&C insurer’s surety capabilities but also expanding its reinsurance product offerings. Besides adding capabilities to the company’s portfolio, judicious buyouts will enhance its insurance operations, paving the way for long-term growth.

Effective Capital Deployment: A strong capital position aids the company to return value to its shareholders via share buybacks, thereby raising optimism among investors. Shareholder-friendly moves like this makes the stock an attractive pick for yield-seeking investors.

Growth Projections: The Zacks Consensus Estimate for current-year earnings per share is pegged at $38.48, representing a staggering year-over-year increase of about 963% on 12.6% higher revenues of $6.8 billion.

For 2019, the consensus mark for earnings per share is pegged at $38.93 on $7.3 billion revenues, depicting a respective 1.2% and 6.3% year-over-year rise.

Positive Earnings Surprise History: The company dwells on a decent earnings surprise history, having exceeded the Zacks Consensus Estimate in two of the trailing four quarters with an average beat of 15.54%.

Other Stocks to Consider

Investors also interested in some other top-ranked stocks from the insurance industry may look at Alleghany Corporation (NYSE:Y) , AXIS Capital Holdings Limited (NYSE:AXS) and NMI Holdings, Inc. (NASDAQ:NMIH) , each sporting a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alleghany provides property and casualty reinsurance and insurance products in the United States and internationally. The company delivered positive surprises in three of the last four quarters with an average beat of 17.61%.

AXIS Capital provides various specialty insurance and reinsurance products worldwide. The company pulled off positive surprises in two of the last four quarters with an average beat of 5.11%.

NMI Holdings provides private mortgage guaranty insurance services in the United States. The company came up with positive earnings surprises in three of the last four quarters with an average beat of 24.55%.

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