Insurance companies serve as the backbone of risk management, providing essential protection and financial security for individuals and businesses. But worries about an economic slowdown and potential claims deterioration have kept sentiment in check, and over the past six months, the industry’s 3.7% return has trailed the S&P 500 by 1.7 percentage points.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. Keeping that in mind, here is one insurance stock boasting a durable advantage and two we’re passing on.
Two InsuranceStocks to Sell:
Hartford (HIG)
Market Cap: $34.92 billion
Recognizable by its iconic stag logo that dates back to 1810, The Hartford (NYSE: HIG) provides property and casualty insurance, group benefits, and investment products to individuals and businesses across the United States.
Why Does HIG Give Us Pause?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 5.3% over the last five years was below our standards for the insurance sector
- Annual net premiums earned growth of 7% over the last four years lagged behind its insurance peers as its large revenue base made it difficult to generate incremental business
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 15.8% annually
Hartford’s stock price of $122.98 implies a valuation ratio of 2x forward P/B. Read our free research report to see why you should think twice about including HIG in your portfolio.
Enact Holdings (ACT)
Market Cap: $5.28 billion
Playing a critical role in helping first-time homebuyers access the housing market, Enact Holdings (NASDAQ: ACT) provides private mortgage insurance that enables lenders to offer home loans with lower down payments while protecting against borrower defaults.
Why Do We Pass on ACT?
- Net premiums earned stagnated over the last four years and signal the need for new growth strategies
- Operational productivity has decreased over the last two years as its combined ratio worsened by 16.7 percentage points
- Annual earnings per share growth of 2.4% underperformed its revenue over the last two years, showing its incremental sales were less profitable
Enact Holdings is trading at $35.21 per share, or 1x forward P/B. To fully understand why you should be careful with ACT, check out our full research report (it’s free).
One Insurance Stock to Watch:
Hamilton Insurance Group (HG)
Market Cap: $2.13 billion
Founded in 2013 and operating through three distinct underwriting platforms across four countries, Hamilton Insurance Group (NYSE: HG) operates global specialty insurance and reinsurance platforms across Lloyd's, Ireland, Bermuda, and the United States.
Why Are We Positive On HG?
- Annual revenue growth of 36.7% over the past two years was outstanding, reflecting market share gains this cycle
- Market share has increased this cycle as its 26.1% annual net premiums earned growth over the last two years was exceptional
- Combined ratio expanded by 13.8 percentage points over the last two years as it scaled and became more efficient
At $20.93 per share, Hamilton Insurance Group trades at 0.8x forward P/B. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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