Stefanie Kammerman, the Stock Whisperer, here to tell you the MoneyShow Dark Pool picks July 19: Gol...
One Insurer That Has Found Success
10/04/2012 12:13 pm EST
Many insurers have had a tough go of it, since their businesses follow the financials to a certain extent, but this one is an exception to the rule and worth a look for long-term investors, suggests David Fried of The Buyback Letter.
Allstate (ALL) is the nation's biggest publicly traded US home and auto insurer, and is a new addition to our model buyback portfolio.
Widely known for its "You're In Good Hands With Allstate" slogan, Allstate insures nearly 16 million consumers, who use its insurance products (auto, home, life, and retirement) and services.
It was created in 1931 by Sears, Roebuck & Co., went public in 62 years later, and became independent in 1995 when Sears spun off its interest to shareholders. It has a market cap of $18.08 billion.
Allstate's recent second-quarter report revealed that its property-liability ratio improved substantially, which means that more of the money taken in as premiums was retained. This shows that Allstate managed to avoid large payouts, despite damaging storms earlier this year, such as the destructive hailstorm in Texas in June. (We have not yet seen the insurance effects caused by Hurricane Isaac.)
Allstate is currently trading with a P/E below ten and sports a dividend yield around 2.3%. Allstate has raised homeowner premiums this year, and has written more policies than at the same time last year.
As low interest rates have drained the income insurance companies traditionally make from investments, other sources of income have had to fill in.
As a counterpoint to that, Allstate increased its dividend this year by a penny per share over that of 2011. In the last 12 months, management has reduced shares outstanding by 6.1%.
Related Articles on STOCKS
We are still on guard for corrective (even fairly volatile) declines in the weeks and months ahead, ...
From the Nov. 1, 2017 closing low at $5.07 to the March 26 closing high at $12.95, shares of Massach...
Big changes are coming this fall for investors and traders. The S&P 500 telecommunications servi...