Yahoo Finance Here's Why Hold Strategy is Appropriate for AXIS Capital (AXS)
AXIS Capital Holdings Limited AXS has been gaining momentum on the back of increases in lines of business, new business growth, continued strong retentions, accelerated digitalization and prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for AXIS Capital’s 2023 earnings is pegged at $7.38 per share, indicating a 27% increase from the year-ago reported figure of 10.8% higher revenues of $5.8 billion. The consensus estimate for 2024 earnings is pegged at $8.50 per share, indicating a 15.1% increase from the year-ago reported figure on 5.1% higher revenues of $6.18 billion.
The expected long-term earnings growth rate is 5%.
Estimate Revision
The Zacks Consensus Estimate for 2024 has moved 0.9% north in the past 60 days. This should instill investors' confidence in the stock.
Earnings Surprise History
AXS has a decent earnings surprise history. It beat estimates in three of the last four quarters and missed in one, with the average being 5.70%.
Zacks Rank & Price Performance
AXIS Capital currently carries a Zacks Rank #3 (Hold). The stock has rallied 5% year to date, outperforming the industry’s growth of 2.8%.
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Return on Equity (ROE)
AXIS Capital’s ROE for the trailing 12 months is 12.7%, expanded 290 basis points year over year. This reflects its efficiency in utilizing shareholders’ funds.
Business Tailwinds
The property and casualty insurer remains poised to gain from the repositioning of the portfolio and markets offering profitable growth, lower volatility, strong market presence, better pricing as well as margin expansion. Pricing improved in virtually every line of business, with many lines continuing to witness strong double-digit increases. AXIS Capital expects disciplined pricing to persist in both insurance and reinsurance in 2023.
The Insurance segment should continue to gain from favorable market conditions, increased new business opportunities, rate increases on renewal and continued strong retentions.
The Reinsurance segment is expected to benefit from increases in accident and health, motor, catastrophe and credit and surety lines. It will also gain from increases in liability and professional lines owing to premium adjustments, primarily related to favorable market conditions, new business growth and increased rates on business in North America and Global Markets.
The insurance industry has been witnessing accelerated digitalization. AXS has made investments in technology that help in the effective usage of data, aid higher-value processes and activities, support new lines of business and enable efficient operations.
AXIS Capital has an impressive dividend history, boasting one of the highest dividend yields among its peers. It hiked dividends for the last 18 years at an eight-year CAGR (2015 – 2022) of 5.3%, driven by solid earnings. Its dividend yield is currently 3%, way above the industry average of 0.3%.
The insurer also has a $100 million share buyback program through 2023 under its authorization.
Stocks to Consider
Some better-ranked stocks from the property and casualty insurance industry are Kinsale Capital Group, Inc. KNSL, Everest Re Group, Ltd. RE and Selective Insurance Group, Inc. SIGI, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kinsale Capital has a solid track record of beating earnings estimates in each of the last four quarters, the average being 13.83%. Year to date, KNSL has gained 22.6%.
The Zacks Consensus Estimate for KNSL’s 2023 and 2024 earnings per share is pegged at $9.92 and $11.94, indicating a year-over-year increase of 27.1% and 20.4%, respectively.
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 $44.28 and $53.54, indicating a year-over-year increase of 63.5% and 20.9%, respectively. Year to date, RE has gained 11.5%.
The Zacks Consensus Estimate for Selective Insurance’s 2023 and 2024 earnings per share is pegged at $6.62 and $7.60, indicating a year-over-year increase of 31.6% and 14.8%, respectively. Year to date, SIGI has gained 8.1%.
The Zacks Consensus Estimate for SIGI’s 2023 and 2024 revenues is pegged at $4.17 billion and $4.60 billion, indicating a year-over-year increase of 13.6% and 10.1%, respectively.
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Axis Capital Holdings Limited (AXS) : Free Stock Analysis Report
Everest Re Group, Ltd. (RE) : Free Stock Analysis Report
Selective Insurance Group, Inc. (SIGI) : Free Stock Analysis Report
Kinsale Capital Group, Inc. (KNSL) : Free Stock Analysis Report
