Yahoo Finance Should You Retain Genworth (GNW) Stock in Your Portfolio?
Shares of Genworth Financial Inc. GNW gained 48.91% in the last one year, significantly outperforming the Life Insurance industry’s growth of 25.61%. Also, the company saw estimates for 2017 moving north by nearly 7.9%. We expect the stock to retain its momentum on the back of a number of positives.
The life insurer remains optimistic about its pending acquisition by China Oceanwide. The buyout is expected to result in better services than currently offered and help improve value for Genworth’s customers. This in turn will accelerate the company’s long-term growth.
Further, Genworth remains focused on strengthening its balance sheet and stabilizing or improving ratings over time, particularly in its U.S. MI (Mortgage Insurance) business.
Moreover, the company’s mortgage insurance segment has been generating profits after incurring losses over an extended period. This apart, the company’s U.S. Mortgage Insurance business has been reporting improved results, mainly due to lower new delinquency development and effective loss mitigation programs as well as changes in aging of existing delinquencies.
Genworth’s stock seems to be undervalued as it is trading at 0.14x, with respect to price to book multiple, over a period of one year. This compares favorably with the Life Insurance industry’s multiple of 1.75x.
However, the Zacks Rank #3 (Hold) life insurer has been witnessing lower sales over the last several years, owing to new products and pricing changes at U.S. Life Insurance division. The company anticipates sales in the U.S. Life division to be two-third of Long Term Care Insurance, and one-third of Life Insurance in the near term.
Stocks to Consider
Some better-ranked stocks from the insurance industry include Health Insurance Innovations, Inc. HIIQ, Fidelity & Guaranty Life FGL, Argo Group International Holdings, Ltd. AGII.
Health Insurance Innovations operates as a developer, distributor, and administrator of cloud-based individual health and family insurance plans, and supplemental products in the U.S. The company delivered positive surprises in all of the last four quarters with an average beat of 270.84%. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fidelity & Guaranty Life offers annuities and life insurance products in the U.S. The company delivered positive surprises in two of the last four quarters with an average beat of 15.85%. The company carries a Zacks Rank #2 (Buy).
Argo Group International Holdings underwrites specialty insurance and reinsurance products in the P&C market worldwide. The company delivered positive surprises in all of the last four quarters with an average beat of 36.54%. The company holds a Zacks Rank #2.
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Health Insurance Innovations, Inc. (HIIQ): Free Stock Analysis Report
Fidelity and Guaranty Life (FGL): Free Stock Analysis Report
Genworth Financial Inc (GNW): Free Stock Analysis Report
Argo Group International Holdings, Ltd. (AGII): Free Stock Analysis Report
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