Jim Cramer's 4 Best Stock Picks in the Insurance Sector

NEW YORK (TheStreet) - Insurance companies may sound like boring investments but TheStreet's Jim Cramer names the sector as one of 12 where investors should put their money.

In each of Cramer's 12 sectors, "you can almost throw darts and win with a couple of rare exceptions," he wrote in Here Are 12 Sectors to Bet On on the Real Money Web site.

"Remember how everyone got the rates wrong? You would think that would mean the insurers wouldn't be able to make a stand. You would be wrong. Allstate (ALL) , Hartford (HIG) and Chubb (CB) are all incredible," Cramer wrote.

"Again, though, you know its Travelers (TRV) by a nose, mainly a nose that's a Dow stock," he added. "What's behind the move? I think benign pricing, easy comparisons and anything in their investment portfolios that hadn't come back to life sure has now."

The S&P 500 Insurance Industry Group Index, which has risen 5.2% this year compared to the broader S&P 500 Index, is up 12% year to date.

We've listed Cramer's picks alongside the TheStreet Ratings, a proprietary stock rating tool designed to project a stock's total return potential over a 12-month period that includes both price appreciation and dividends. The tool uses 30 major data points and a quantitative approach to rating stocks. TheStreet Ratings' model is both objective and subjective. Objective information it gathers includes a company's past operating revenues and its volatility, financial strength and cash flow. Subjective information folded into the analysis includes expected equities market returns, future interest rates, implied industry outlook and the earnings forecast.

Cramer's analysis and that of TheStreet Ratings may differ, because Cramer may evaluate stocks without regard to a time horizon while TheStreet Ratings uses consensus estimates for the next 12 months. In addition, changes in TheStreet Ratings may lag Jim Cramer's analysis, as consensus estimates may take some time to change meaningfully.

Check out all of Cramer's picks in the insurance sector.

Allstate

Allstate (ALL) is a personal property and casualty insurer. As of Sept. 30, the company had $108.3 billion in assets.

Market Cap: $29 billion

52-week high: $68.47 on Nov. 28

52-week low: $49.17 on Feb. 5

Year-to-date Return: 25%

TheStreet Ratings team rates ALLSTATE as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate ALLSTATE CORP (ALL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

You can view the full analysis from the report here: ALL Ratings Report

The Hartford Financial Services Group

The Hartford Financial Services Group (HIG) offers property and casualty insurance, group benefits and mutual funds and investments to both individuals and business customers. At Sept. 30, the company had $247.1 billion in total assets.

Market Cap: $29 billion

52-week high: $68.47 on Nov. 28

52-week low: $49.17 on Feb. 5

Year-to-date Return: 25%

TheStreet Ratings team rates HARTFORD FINANCIAL SERVICES as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate HARTFORD FINANCIAL SERVICES (HIG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

You can view the full analysis from the report here: HIG Ratings Report

Chubb Group

Chubb Group (CB) offers property and casualty products and services to both businesses and individuals. At Sept. 30, Chubb had assets totaling $52.1 billion.

Market Cap: $24 billion

52-week high: $103.78 on Nov. 28

52-week low: $82.98 on Feb. 3

Year-to-date Return: 6.8%

TheStreet Ratings team rates CHUBB as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate CHUBB CORP (CB) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in net income and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."

You can view the full analysis from the report here: CB Ratings Report

The Travelers Cos.

The Travelers Cos. (TRV)  is a leading provider of property casualty insurance for auto, home and business. The company provides a wide range of commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals. As of Sept. 30, Travelers had total assets of $104.5 billion.

Market Cap: $35 billion

52-week high: $105.15 on Dec. 3, 2014

52-week low: $79.89 on Feb. 4

Year-to-date Return: 16%

TheStreet Ratings team rates TRAVELERS COS as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate TRAVELERS COS INC (TRV) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, increase in stock price during the past year and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins."

You can view the full analysis from the report here: TRV Ratings Report

-Written by Laurie Kulikowski in New York.


Follow @LKulikowski

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