Assurant, Inc. AIZ shares are trading at a discount compared to the Zacks Multi-line Insurance industry. Its forward price-to-book value of 2.14X is lower than the industry average of 2.52X, the Finance sector’s 4.06X and the Zacks S&P 500 Composite’s 7.98X. The multi-line insurer has a Value Score of B.

The insurer has a market capitalization of $10.79 billion. The average volume of shares traded in the last three months was 0.4 million. The insurer has a solid track record of beating earnings estimates in each of the last four quarters, the average being 17.03%.

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Shares of EverQuote, Inc. EVER are trading at a multiple higher than the industry average, while Axis Capital Holdings Limited RDN and Old Republic International Corporation ORI shares are trading at a discount.

AIZ is an Outperformer

Shares of Assurant have gained 17.7% in the past year, outperforming its industry, the Finance sector and the Zacks S&P 500 composite’s growth of 6.7%, 15.6% and 9.1%, respectively.

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

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AIZ Trading Above 50-Day and 200-Day Moving Averages

Shares of Assurant closed at $212.60 on Tuesday and are trading above the 50-day and 200-day simple moving averages (SMA) of $208.31 and $195.82, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

AIZ’s Growth Projection Encourages

The Zacks Consensus Estimate for Assurant’s 2025 revenues is pegged at $12.52 billion, implying a year-over-year improvement of 4.7%. 
The consensus estimate for 2026 earnings per share and revenues indicates an increase of 18.1% and 4.3%, respectively, from the corresponding 2024 estimates. 

Earnings have grown 16.6% in the past five years, better than the industry average of 9.9%. 

Assurant’s Favorable Return on Capital

Return on equity in the trailing 12 months was 17.2%, better than the industry average of 14.3%. 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 AIZ’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 11.1%, better than the industry average of 2%.

Factors Impacting AIZ

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

Better Homeowners’ performance 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.

Wealth Distribution 

AIZ has a solid capital management policy in place. Assurant’s board of directors approved an 11% hike in cash dividend in November 2024. AIZ’s distribution of wealth to shareholders via dividend hikes is impressive. The recent hike marks the insurer increasing dividends for straight 20 quarters. As of now, $351 million remains under the current repurchase authorization. AIZ remains focused on maintaining balance and flexibility to support new business growth while returning excess capital to shareholders. From a share repurchase perspective, Assurant’s expected range for 2025 is between $200 million and $300 million, subject to M&A as well as market and other conditions.

Conclusion

Well-performing Global Lifestyle business, growth of fee-based capital-light businesses, solid capital management, favorable estimates and effective capital deployment should favor Assurant’s results. AIZ's higher return on capital and favorable growth estimates present significant growth opportunities.

Assurant’s impressive dividend history 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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Assurant, Inc. (AIZ) : Free Stock Analysis Report

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

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