Assurant, Inc. AIZ is well-poised to gain on the back of a well-performing Global Lifestyle business, growth of fee-based capital-light businesses and solid capital management.

Earnings Estimates

The Zacks Consensus Estimate for Assurant’s 2024 earnings is pegged at $16.02 per share, indicating a 3.4% increase from the year-ago reported figure on 4.1% higher revenues of $11.66 billion.

Earnings Surprise History

Assurant has a decent surprise history, beating earnings estimates in each of the last four quarters, the average surprise being 42.15%.

Northbound Estimate Revision

The Zacks Consensus Estimate for 2024 and 2025 earnings has moved up nearly 5.9% and 6.4%, respectively, in the past 30 days, reflecting investors’ optimism.

Zacks Rank

The company currently carries a Zacks Rank #2 (Buy). Over the past year, shares of AIZ have risen 44.6% compared with the industry’s growth of 5.6%.

Image Source: Zacks Investment Research

Style Score

AIZ has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum. Back-tested results have shown that stocks with a VGM Score of A or B combined with a Zacks Rank #1 (Strong Buy) or 2 offer better returns.

Attractive Valuation

Assurant shares are trading at a discount than the industry average. Its price-to-book value of 1.98X is lower than the industry average of 2.73X. Before the valuation expands, it is preferable to take a position in the stock.

AIZ has an impressive Value Score of B. Value stocks have a long history of showing superior returns.

Business Tailwinds

Assurant’s focus on growing fee-based capital-light businesses that presently constitute 52% of segmental revenues bodes well for growth. Management estimates that contribution from the same will continue to grow in double digits over the longer term.

Better performance in Homeowners reflecting higher lender-placed net earned premiums should drive better results at Global Housing. At the same time, growth across Connected Living and Global Automotive should drive Global Lifestyle.

The insurer remains focused on ramping up the Connected Living platform, deploying innovative products and services, and adding new partnerships. These initiatives are expected to double the margins of Connected Living to 8% over the long term.

Investment income, which has been witnessing an increase in net investment income over the past few years, should benefit from higher yields on fixed-maturity securities.

AIZ has a solid capital management policy in place. The insurer has been increasing dividends for the last 19 straight years. From Jan 1 through Feb 2, 2024, Assurant repurchased shares for $10 million, with $664 million remaining under the current repurchase authorizations. The company expects share repurchases in the range of $200-$300 million for 2024. Notably, its free cash flow conversion has remained more than 100% over the last many quarters, reflecting its solid earnings.