Top Insurance Company Stocks to Buy in 2019
Insurance companies are financial institutions that are in the business of risk management. Generally, these companies are either life insurance or property and casualty insurance. The two types have different considerations.
Life Insurance companies are mandated by the government to maintain a certain level of reserve. These companies are thus less leveraged. It is important to note that insurers evaluate assets at market value but liabilities at book value. These life insurance policies have a long term outlook, as benefits are not paid out for many years.
Property and casualty insurance companies have shorter policy duration. Due to the nature of this type of insurance, timing and amount of liabilities are less certain than for life insurance companies. These insurance companies also go through an underwriting cycle.
🚑 Insurance Company
Canada Stocks
Manulife Financial (MFC-T) Life & Health Insurance
A Canadian multinational insurance company. They announced good earnings and profits, as well as pays a good dividend. They have been growing internationally, with growth particularly in Asia. They pay a dividend of 4.1%
Opinion about MFC.TO: Doesn't own any of the lifecos. This name struggled for quite a while, but then broke out on strategic repositioning by…
Stockchase Industrial-Alliance Life Ins (IAG-T)
A Quebec City based insurance company with a wealth management business. Their operations are more focused on personal insurance. A more regional insurer. The dividend at 3% is considered safe.
Opinion about IAG.TO: The fact that interest rates have been very low had affected the insurance industry. Not an expensive stock. Trading at 9.5…
Stockchase Sun Life Financial Inc (SLF-T)
One of the largest and oldest life insurance companies in the world. They are diversifying into wealth management and buying real estate. A long-term hold that pays a good dividend at 4%.
Opinion about SLF.TO: Now is a good time to take some money off the table. Financials have outperformed the fundamentals in the next few years. Wait…
Stockchase Great West Lifeco (GWO-T)
A value pick with low volatility. They operate in North America, Europe and Asia through subsidiaries that are regionally focused. A good long-term hold when interest rates rise. However the short term rate outlook has changed and it has affected the stock. The yield is 5%.
Opinion about GWO.TO: All the insurance names, both in Canada and the US, continue to work. If interest rates do, in fact, go higher, that will only…
Stockchase Fairfax Financial (FFH-T) Property & Casualty Insurance
A financial holding company has activities in property, casualty and life insurance. They also operate in the investment management and insurance claims management sphere. It is well-run and a good long term hold.
Opinion about FFH.TO: In the defensive part of Canadian financial services. Underwriting profitability consistently getting better, the core reason…
Stockchase Intact Financial (IFC-T)
The largest provider of property and casualty insurance in Canada. They have a strong balance sheet and has grown well. Intact is now well-positioned to make acquisitions.
Opinion about IFC.TO: Likes the thesis of buying companies that you pay into via your monthly bills. Likes the business. Nice diversifier within the…
Stockchase U.S. Stocks
St. Paul Travelers Companies Inc. (TRV-N) Property & Casualty Insurance
One of the largest U.S. insurance companies for commercial property casualty insurance and personal insurance. They pay a dividend of 2.12%
Opinion about TRV: A high quality company that is cheap. Insurance stocks have become incredibly compressed because of the fear of higher interest…
Stockchase First American Corp. (FAF-N)
They are in the home insurance business. This is a play on the US housing market where prices have softened. This has affected the stock performance this year. They have done a good job of consistently raising their dividend which is at 3%.
Opinion about FAF: Model price is $44.70. Expert opinions on First American Corp. (FAF) — buy, sell, or hold ratings from Canadian and US analysts on…
Stockchase Allstate (ALL-N)
An efficient insurance company that is generating free cash flow. They reduced their share count by half and raised dividends. Low interest rates have been detrimental as premiums are not generating as much income. The yield is at 2.1%
Opinion about ALL: Share count keeps falling. Massive free cashflow, 12x earnings, dividend growth well above average. Premier company in their…
Stockchase Kingsway Financial Services (KFS-T)
A property and casualty insurer in the United States. They operate through several segments, each covering insurance underwriting, extended warranty, and leased real estate.
Opinion about KFS.TO: This is a company that has had difficulties in the past and has managed to recover. He is kicking the tires on them. This could…
Stockchase Markel Corporation. (MKL-N)
A holding company for insurance that invest its cash in stocks instead of bonds They are getting into wealth management through insurance but there were some hiccups last year. Still, it is a well run company with a good track record.
Opinion about MKL: This and RLI are unique specialty players with long track record of profits. Expert opinions on Markel Corporation. (MKL) — buy,…
Stockchase Progressive Corp Ohio (PGR-N)
The largest provider of car insurance in the U.S. They have low cost operations so their profitability and growth are higher than their peers. It’s enjoyed a long-term uptrend.
Opinion about PGR: Good fundamentals with support at $59. It can move into into the $70s again. (Analysts’ price target is $74.06)
Stockchase Aflac Inc (AFL-N) Life & Health Insurance
The largest provider of supplemental insurance in the United States. They pay a dividend of 1.94%. They have consistently beat earnings and are growing. A low volatile name.
Opinion about AFL: Insurance Company. 75% of their revenues and earnings come from the Japanese Market. Very reasonably priced, and a great play on a…
Stockchase Metlife (MET-N)
A holding corporation for Metropolitan Life Insurance Company. They are buying back stocks. The US retirement portfolio has been doing well, and they are growing in Asia and Europe.
Opinion about MET: The balance sheet is impaired and there should be write-offs, which he hasn't seen. He sees 32% upside with a $64 model price, but…
Stockchase Prudential Financial Inc (PRU-N)
A financial company that has operations in insurance, wealth management and other financial products through their subsidiaries. It has been through a tough couple of years, but it may be changing. It pays a dividend of 4%.
Opinion about PRU: He would avoid life insurance in general because rising interest rates raise the present value of their liabilities.
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