W.R. Berkley Corporation WRB has been trading above its 50-day simple moving average (SMA), signaling a short-term bullish trend. The stock closed at $62.23 on Tuesday, near its 52-week high of $65.49. This proximity underscores investor confidence. It has the ingredients for further price appreciation.

The 50-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important as this is the first marker of an uptrend or downtrend.

WRB Trading Above 50-Day Moving Average

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The insurer has a market capitalization of $23.59 billion. The average volume of shares traded in the last three months was 1.78 million. WRB has a solid track record of beating earnings estimates in each of the last four quarters, the average being 10.30%.

WRB’s Price Performance

Shares of this property and casualty insurer have gained 6.4% in the year-to-date period, outperforming the Finance sector’s return of 4.9% and the S&P 500 composite’s decline of 0.9%. It, however, underperformed the industry’s growth of 11.4%.

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WRB’s Growth Projection Encourages

The Zacks Consensus Estimate for W.R. Berkley’s 2025 earnings per share indicates a year-over-year increase of 4.5%. The consensus estimate for revenues is pegged at $14.5 billion, implying a year-over-year improvement of 7.2%. 

The consensus estimate for 2026 earnings per share and revenues indicates an increase of 8.8% and 8.1%, respectively, from the corresponding 2025 estimates. 

Notably, earnings grew 27.8% in the past five years, better than the industry average of 19.6%.

Return on Capital

Return on equity (ROE) for the trailing 12 months was 20.5%, which compared favorably with the industry’s 8.2%. This reflects its efficiency in utilizing shareholders’ funds.  

Also, return on invested capital (ROIC) has been increasing over the last few quarters while the company raised its capital investment over the same time frame. This reflects WRB’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 10%, better than the industry average of 7.2%.

Key Drivers of WRB

As part of its growth strategy, WRB has been focusing on commercial lines, including excess and surplus lines, admitted lines and specialty personal lines, where it also has a competitive advantage.

WRB’s insurance business, which contributes the lion’s share to net premium written, is poised to grow on the strength of several new startup units in varied business lines, expansion of international business that offers diversification benefits, rate increase, market dislocations and high retention.  

WRB remains focused on expanding selectively in attractive global markets and thus has operations in emerging markets of the United Kingdom, Continental Europe, South America, Canada, Scandinavia, Asia and Australia.

WRB boasts more than 60 straight quarters of favorable reserve development, given its prudent underwriting. An operational excellence supports it to maintain a solid balance sheet with sufficient liquidity and strong cash flows.

The Zacks Consensus Estimate for 2025 moved 1.7% north in the last 60 days. This should instill investors' confidence in the stock.

WRB Shares are Expensive

WRB shares are trading at a premium to the Zacks Property and Casualty Insurance industry. Its price-to-book value of 2.89X is higher than the industry average of 1.55X.

Shares of The Travelers Companies, Inc. TRV and Cincinnati Financial Corporation CINF are trading at a multiple higher than the industry average, while Axis Capital Holdings Limited AXS shares are trading at a discount.

Conclusion

The insurer is set to grow on rate increases, reserving discipline, diversification benefits, momentum in international business, investment in alternative assets and consistent cash flow.

Banking on consistent cash flow, W.R. Berkley has been hiking dividends since 2005, as well as paying special dividends apart from buying back shares. Its dividend yield of 0.5% appears attractive compared with the industry average of 0.2%, making it an attractive pick for yield-seeking investors. It is, therefore, wise to hold on to this Zacks Rank #3 (Hold) stock at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report

W.R. Berkley Corporation (WRB) : Free Stock Analysis Report

Cincinnati Financial Corporation (CINF) : Free Stock Analysis Report

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research