BOSTON ( TheStreet) -- Insurance stocks are in vogue as companies are making money on investments and writing policies. Plus, the crazy half-brother known as AIG ( AIG) has been lying low, giving insurance companies a breather from bad-news flow.

Indianapolis-based Baldwin & Lyons ( BWINB) is rising in investment stature, according to's stock model, which upgraded the insurer two months ago following impressive third-quarter results. Baldwin & Lyons has risen 3% since then and recently broke into our list of the top-100-ranked stocks.

Baldwin & Lyons endured a difficult 2008. It posted net losses in three out of four quarters. Management watched the company's share price plummet from a high of $27.39 to a low of $16.50. In 2009, losses subsided and profitability resumed. In the third quarter, Baldwin & Lyons swung to a profit of $14 million, or 97 cents a share, from a loss of $7 million, or 48 cents, a year earlier. The company's gross and operating margins climbed from negative territory to 20%.

Baldwin & Lyons' balance sheet improved considerably. Cash and marketable securities more than doubled to $189 million as debt increased 23% to $9 million. The insurer is modestly levered. Its two U.S.-based subsidiaries, Protective Insurance and Sagamore Insurance, receive strong marks from our insurance model. Protective earns a grade of "A" (excellent) and Sagamore merits a grade of "B" (good). Our stock model gives the holding company a financial-strength score of 7.9 out of 10, higher than the "buy"-list average of 7.1.

In addition, the stock pays a quarterly dividend of 25 cents, which translates to an annual yield of 4.2%. The company's payout ratio, a measure of dividend safety, clocks in at a stable 46%. The quarterly dividend peaked at 35 cents a share in 2007, prior to the onset of the recession. If operating conditions continue to improve, it's feasible for management to raise the distribution again. Baldwin & Lyons has amassed a record of consistent payouts and dividend growth starting in the 1980s.

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