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AIZ Rises 14.9% in a Year: A Signal for Investors to Hold Tight?

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Assurant, Inc. (AIZ - Free Report) shares have risen 14.9% in the past year compared with the industry's growth of 11.1%. The Finance sector and the Zacks S&P 500 index have returned 25.6% and 24.1%, respectively, in the said time frame. With a market capitalization of $10.26 billion, the average volume of shares traded in the last three months was 0.3 million.

AIZ price Performance

Zacks Investment Research
Image Source: Zacks Investment Research

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

Currently priced at $200.14, the stock is trading above its 200-day simple moving average (SMA) of $192.78, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

Growth Projection for AIZ

The Zacks Consensus Estimate for Assurant’s 2025 earnings per share indicates a year-over-year increase of 1.4%. The consensus estimate for revenues is pegged at $12.40 billion, implying a year-over-year improvement of 3.7%. 

The consensus estimate for 2026 earnings per share and revenues indicates an increase of 13.2% and 3.8%, respectively, from the corresponding 2024 estimates. 

Earnings have grown 16.6% in the past five years, better than the industry average of 9.7%. Assurant has an impressive Growth Score of B. This style score helps analyze the growth prospects of a company. 

Estimate Revision

The Zacks Consensus Estimate for 2026 has moved 1.9% north in the past 30 days. This should instill investors' confidence in the stock.

Impressive Earnings Surprise History of Assurant

Assurant’s bottom line surpassed earnings estimates in each of the last four quarters, the average being 17.03%.

Shares are Affordable

Assurant 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 2.01X, lower than the industry average of 2.38X. Also, it has a Value Score of A.

Shares of The Travelers Companies, Inc. (TRV - Free Report) are also trading at a multiple higher than the industry average, while NMI Holdings Inc (NMIH - Free Report) and Cincinnati Financial Corporation (CINF - Free Report) shares are trading at a discount.

Assurant’s Favorable Return on Capital

Return on equity in the trailing 12 months was 17.2%, better than the industry average of 15.1%. 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 11.2%, better than the industry average of 2.3%.

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.

Final Take on AIZ

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 also has a VGM Score of B. Stocks with a favorable VGM Score are those with the most attractive value, best growth and most promising momentum compared with peers. Its 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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