Advertisement
UK markets closed
  • NIKKEI 225

    39,232.80
    -290.75 (-0.74%)
     
  • HANG SENG

    16,600.46
    -121.23 (-0.72%)
     
  • CRUDE OIL

    85.65
    +0.24 (+0.28%)
     
  • GOLD FUTURES

    2,399.30
    +25.20 (+1.06%)
     
  • DOW

    37,735.11
    -248.13 (-0.65%)
     
  • Bitcoin GBP

    50,735.07
    -434.84 (-0.85%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • NASDAQ Composite

    15,885.02
    -290.08 (-1.79%)
     
  • UK FTSE All Share

    4,338.90
    -14.76 (-0.34%)
     

Hartford Financial (HIG) Up 20% in Past 6 Months: More Room to Run?

Shares of The Hartford Financial Services Group, Inc. HIG have gained 19.6% in the past six months compared with the industry’s 10.4% increase. The Finance sector and the S&P 500 composite index rallied 7.1% and 0.5%, respectively, in the same time frame. With a market capitalization of $24.2 billion, the average volume of shares traded in the last three months was 1.7 million.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Growing premiums attributable to uninterrupted rate hikes, growth-related initiatives and a strong financial position continue to drive HIG.

The insurer with a current Zacks Rank #3 (Hold) has a solid track record of beating estimates in each of the trailing six quarters. Return-on-equity (ROE) of HIG, which underlines growth potential, stands at 16.5% as of Sep 30, 2022, higher than the industry average of 8.4%.

Can HIG Retain the Momentum?

The Zacks Consensus Estimate for Hartford Financial’s 2023 earnings is pegged at $8.38 per share, which suggests 17.5% growth from the 2022 estimate. The consensus mark for revenues stands at $16 billion, which indicates an improvement of 5.9% from the 2022 estimate.

ADVERTISEMENT

The premiums of HIG continue to benefit from the solid performances of its Commercial Lines business. The business is aided by continued rate increases, wider exposure, new business generation and solid retention rates.

Growing premiums bode well for Hartford Financial since it accounts for a significant chunk of its top line. Though HIG grapples with catastrophe losses, frequent losses ramp up the policy renewal rate, which keeps premiums flowing.

Improved fully insured ongoing premiums driven by robust sales and solid enrolment contribute to the sound performance of HIG’s Group Benefits business.

The insurer follows an inorganic growth route through acquisitions to strengthen its capabilities. Hartford Financial keeps an eye on selling off its underperforming businesses to intensify the focus on its U.S. operations. HIG also resorts to numerous cost-cutting measures in the form of restructuring initiatives, that might aid margins in the days ahead.

A strong financial position equips Hartford Financial to engage in the tactical deployment of capital through share buybacks or dividend payments. The last dividend hike of 10% was approved in the month of October 2022.

Hartford Financial boasts an impressive VGM Score of A. VGM Score helps identify stocks with the most attractive value, the best growth and the most promising momentum.

Stocks to Consider

Some better-ranked stocks in the insurance space are Reinsurance Group of America, Incorporated RGA, CNO Financial Group, Inc. CNO and American International Group, Inc. AIG. While Reinsurance Group sports a Zacks Rank #1 (Strong Buy), CNO Financial and American International carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Reinsurance Group’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed the mark once, the average being 49.74%. The Zacks Consensus Estimate for RGA’s 2023 earnings indicates an improvement of 5.5%, while the same for revenues suggests 3.3% growth from the corresponding 2022 estimates. 

The Zacks Consensus Estimate for RGA’s 2023 earnings has moved 2.3% north in the past 30 days. Shares of Reinsurance Group have gained 22.6% in the past six months.

CNO Financial’s bottom line outpaced estimates in three of the trailing four quarters and missed the mark once, the average surprise being 26.02%. The Zacks Consensus Estimate for CNO’s 2023 earnings indicates an improvement of 0.4%, while the same for revenues suggests 3% growth from the corresponding 2022 estimates. 

The Zacks Consensus Estimate for CNO’s 2023 earnings has moved 1.3% north in the past 30 days. Shares of CNO Financial have gained 30.3% in the past six months.

American International’s earnings surpassed the Zacks Consensus Estimate in three of the last four quarters and missed the mark once, the average beat being 13.01%. The Zacks Consensus Estimate for AIG’s 2023 earnings indicates an improvement of 40.3%, while the same for revenues suggests 8.1% growth from the corresponding 2022 estimates. 

The Zacks Consensus Estimate for AIG’s 2023 earnings has moved 0.3% north in the past 30 days. Shares of American International have gained 23.2% in the past six months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

The Hartford Financial Services Group, Inc. (HIG) : Free Stock Analysis Report

American International Group, Inc. (AIG) : Free Stock Analysis Report

CNO Financial Group, Inc. (CNO) : Free Stock Analysis Report

Reinsurance Group of America, Incorporated (RGA) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research