The stock market may have recovered most of its losses after having the worst start to a year in history amid crashing crude oil prices and the ripple effects of China's economic and market problems. With the global economic recovery still fragile, there is no knowing when the bears will get on a rampage.
This scenario calls for making investments in defensive growth sectors such as insurance. No matter what happens with stock markets or the economy, people will continue to purchase insurance for themselves and their loved ones. Legendary investor Warren Buffett knows this, and that's why his Berkshire Hathaway has done very well by owning a bunch of insurance companies.
We have identified an under-the-radar insurance stock that can fit into any portfolio with their growth and income opportunities.
This property-liability insurance and life insurance company has grown revenue in each of the last three years, and has recorded solid earnings, even if adjusted EPS declined year over year in 2015. The stability of this household name makes it a good bet for your long-term wealth building needs.
But the real attraction, at least for income investors, is the consistent dividend the company pays, which currently yields 2%. At Allstate, dividends have grown over the last five years, and investors have received dividends without fail each year since 1993. Recently, the company increased its quarterly dividend by 10% and will pay 33 cents per share to shareholders.
The stock's price should continue to rise, too. Analysts have a 12-month median price target of $71 on the stock, which suggests shares could appreciate 8.3% in the next year. Last month, Citigroup raised its rating on the stock to buy from neutral. Also, last month Goldman Sachs raised its price target on the stock from $65 to $69.
Further, at its current price-to-earnings ratio of 13, Allstate is cheaper than rival Progressive, which has a P/E of 15.4, and the S&P 500, which has a P/E of about 23.
The Federal Reserve may not have provided sufficient clarity on further interest rate action, but if and when it does raise interest rates, it will augur well for insurance companies.
As we've just explained, this insurance industry stock is a good bet now for your long-term income needs. Are you making the right investment moves for your retirement, or are you blowing it by making all-too-common money mistakes? There are crucial steps that you should be taking now, to build wealth over the long haul. To find out whether you'll have enough money in your later years, download our free report: Your Ultimate Retirement Guide.