AXIS Capital Holdings Limited’s AXS shares have rallied 58.5% in the past year compared with the industry's growth of 23.9%. The Finance sector and the Zacks S&P 500 index have returned 21.2% and 26.7%, respectively, in the said time frame. With a market capitalization of $7.43 billion, the average volume of shares traded in the last three months was 0.5 million. Currently priced at $88.87, the stock is slightly below its 52-week high of $94.89.

AXS Outperforms Industry, Sector, S&P in a Year

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AXS Trading Above 50-Day and 200-Day Moving Average

This Zacks Rank #3 (Hold) property and casualty line insurer is trading above its 50-day and 200-day simple moving average (SMA) of $87.14 and $75.72, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

AXS’ Growth Projection Encourages

The Zacks Consensus Estimate for AXIS Capital’s 2025 earnings per share and revenues indicates an increase of 5.7% and 10.4%, respectively, from the corresponding 2024 estimates.

Earnings have grown 82.7% in the past five years, better than the industry average of 11.4%. The expected long-term earnings growth rate is 26.7%, outperforming the industry average of 11.2%.

AXIS Capital’s Favorable Return on Capital

Return on equity in the trailing 12 months was 19.2%, better than the industry average of 7.5%. This highlights the company’s efficiency in utilizing shareholders’ funds. 

Also, the return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting AXS’ efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 11.6%, better than the industry average of 5.8%.

AXS Shares are Affordable

AXIS Capital is trading at a discount compared with the industry average. It presents a compelling investment opportunity with its attractive forward 12-month price-to-book ratio of 1.34X, lower than the industry average of 1.53X. Also, it has a Value Score of A.

However, shares of other P&C insurers like The Travelers Companies, Inc. TRV, Cincinnati Financial Corporation CINF and RLI Corp. RLI are trading at multiples higher than the industry average.

Factors Acting in Favor of AXS

AXIS Capital aims to be a leading specialty underwriter and thus focuses on growth areas, including wholesale insurance and lower middle markets. Lowering risk exposure while concentrating on accident and health, excess and supply property, casualty, credit and surety, and specialty reinsurance lines bodes well for growth. 

The Insurance segment is poised to benefit from a diversified portfolio of global specialty businesses, leadership positions and growth opportunities across major business lines.

The Reinsurance business should benefit from strong cycle management, focusing on improving the business mix. 

AXIS Capital stays focused on expanding digital capabilities to create new business growth in desirable smaller accounts. Simplifying operating structure, delivering efficiencies and capitalizing on productivity gains should help it achieve a general and administrative ratio of less than 11% by 2026.

Strategic initiatives have been driving improvement in its operating earnings over the past few years.

Axis Capital has a VGM Score of B. The VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.

Axis Capital’s Impressive Dividend History

Axis Capital's dividend track record is impressive. It hiked its dividend for 18 straight years and currently yields 1.9%, way above the industry average of 0.2%. The insurer boasts one of the highest dividend yields among its peers.

Conclusion

This leading specialty insurer and global reinsurer, which aims to lead in specialty risks, has been repositioning its portfolio and strengthening its book of businesses. Focusing on prudently deploying resources while enhancing efficiencies, improving its portfolio mix and underwriting profitability poises Axis Capital for growth. 

Its impressive dividend history, solid growth projections as well as attractive valuations are other positives. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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