This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Buy-Rated Insurance Stocks for Long-Term Investors

4. Ace Limited

Shares of Ace Limited (ACE) of Zurich closed at $71.49 Thursday, returning 3% year-to-date, following last year's 15% total return.

The company is currently paying a quarterly dividend of 47 cents a share, but announced on Feb. 23 that its board of directors would propose an annual dividend of $1.96 a share -- distributed in quarterly installments of 49 cents -- at Ace Limited's annual meeting in May. On the rather safe assumption that shareholders will approve additional gravy, the forward dividend yield is 2.74%.

The shares trade for 0.9 times tangible book value and 9.5 times the consensus 2012 EPS estimate of $7.55. The consensus 2013 EPS estimate is $7.59.

The company earned $1.6 billion, or $4.65 a share during 2011, declining from $3.1 billion, or $9.11 a share, in 2010, mainly because of $795 million in realized losses on investments. Excluding the investment losses and $432 million in gains recorded in 2010, Ace earned $1.94 a share in 2011, compared to $2.05 a share the previous year.

Ace limited issued guidance for 2012, with operating income "expected to range between $6.65 and $7.05 per share."

Credit Suisse analyst Michael Zaremski has a neutral rating on Ace Limited, with a $73 price target, and said last month that an update of crop insurance premium methodology by the U.S. Department of Agriculture's Risk Management Agency would lead "lower insurance rates for corn and soybean producers (farmers) in the 2012 crop year." The analyst said the premium changes "current crop prices (and lower levels of crop volatility) point to top-line declines in the 4%-8% range for the 2012 crop season," for Ace's crop insurance business.

Zaremski lowered his 2012 EPS estimate for ACE by six cents to $7.16, while also saying "the economics of crop insurance remains relatively attractive and ACE has been a best in class crop underwriter over the years." The analyst estimates ACE will earn $7.15 a share in 2013.

Interested in more on Ace Limited? See TheStreet Ratings' report card for this stock.
3 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
BAC $14.77 0.00%
MET $45.84 0.00%
PRU $78.67 0.00%
TRV $110.91 0.00%
AAPL $93.64 0.00%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs