AXIS Capital Holdings Limited (NYSE:AXS) remains well poised for growth on improved investment income, advanced pricing momentum and prudent capital deployment.
The company has a decent earnings surprise history. It beat estimates in two of the last four quarters, with the beat being 53.46%, on average.
What Makes It an Attractive Pick?
AXIS Capital aims to boost business growth with the use of expanding digital capabilities. With advanced pricing momentum, favorable market conditions are expected to drive business and provide opportunities to leverage its market position and generate profitable growth.
The Zacks Rank #2 (Buy) property and casualty insurer witnessed improved investment income, which increased 9.1% in 2019 from the figure reported in 2018. Solid net investment income can be attributed to higher income from fixed maturities, driven by yields and larger allocation of the portfolio to fixed maturities, along with a realized gain associated with the sale of a privately held investment.
AXIS Capital has a solid capital management policy in place with regular dividend hikes and share buybacks. With a 2.4% hike in its quarterly common share dividend in the fourth quarter of 2019, the company made 14 consecutive dividend raises on the back of solid earnings. Its dividend currently yields 3.8%, better than the industry average of 0.5%, making it an attractive pick for yield-seeking investors.
Estimates for AXIS Capital have been revised upward over the past 60 days, reflecting analysts’ confidence in the stock. The Zacks Consensus Estimate for 2020 earnings per share has moved nearly 2.6% north while that for 2021 has moved up 11.2% in the said time frame.
Shares of AXIS Capital have lost 23.9% in the past year, compared with the industry’s decline of 7.5%. Nevertheless, its solid fundamentals are likely to help the stock regain its momentum going forward.
The Zacks Consensus Estimate for 2020 and 2021 earnings per share is pegged at $5.13 and $5.67, indicating year-over-year increase of 103.5% and 10.5% respectively. The expected long-term earnings growth rate is pegged at 5%.
Other Stocks to Consider
Some other top-ranked property and casualty insurance stocks are Donegal Group, Inc. (NASDAQ:DGICA) , CNA Financial Corporation (NYSE:CNA) and First American Financial Corporation (NYSE:FAF) each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Donegal Group surpassed estimates in the last four quarters, the positive surprise being 271.06%, on average.
CNA Financial surpassed estimates in the last four quarters, the positive surprise being 9.39%, on average.
First American Financial surpassed estimates in the last four quarters, the positive surprise being 17.68%, on average.
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Axis Capital Holdings Limited (AXS): Free Stock Analysis Report
First American Financial Corporation (FAF): Free Stock Analysis Report
CNA Financial Corporation (CNA): Free Stock Analysis Report
Donegal Group, Inc. (DGICA): Free Stock Analysis Report
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