This insurance company beat analysts’ earnings estimates by $0.49 last quarter, and six analysts have recently boosted their EPS forecasts for the company.
Chubb Limited (CB)
From Dow Theory Forecasts
Chubb Limited shares have rallied 4% in 2022, bucking the 11% slump suffered by the S&P 1500 Index. Yet investors may still be underappreciating the company’s growth prospects.
Analyst profit estimates for Chubb have jumped in the past 30 days, with the consensus projecting 18% growth in 2022, well above the industry norm of 4% for S&P 1500 property-and-casualty insurers. Chubb trades at 16 times trailing earnings, in line with its industry norm. But at 14 times estimated 2022 earnings, Chubb shares offer a 28% discount to industry peers.
Admittedly, Chubb’s profit growth can be inconsistent—annual earnings per share has risen in just four of the past seven years. But annual sales are steadily grinding higher, up in each of the past six years.
Chubb’s annual dividend hikes have also been remarkably consistent, stretching back 27 years. Dividend growth has been slower in the past seven years, ranging from 3% to 4%, though the modest payout ratio of 33% suggests flexibility for more dividend hikes in coming years.
Chubb is a Focus List Buy and a Long-Term Buy
Richard Moroney, CFA, Dow Theory Forecasts, dowtheory.com, 800-233-5922, February 23, 2022