2 Highly Ranked Insurance Stocks That May Keep Soaring

Core Insights - Insurance stocks are performing well in the financial sector, with several making it to the Zacks Rank 1 (Strong Buy) list [1] - Rate cuts are expected to benefit insurance companies by reducing borrowing costs and increasing consumer spending on insurance products [1] Group 1: Company Performance - Axis Capital Holdings (AXS) and Mercury General (MCY) are highlighted as top insurance stocks that investors should consider [2] - Axis Capital's stock has increased over 40% this year, while Mercury General's shares have risen nearly 70% [3] - Both companies are part of the Zacks Insurance-Property and Casualty Industry, which ranks in the top 8% of over 250 Zacks industries [3] Group 2: Earnings and Valuation - Axis Capital trades at a forward earnings multiple of 7.4X, with EPS expected to rise 9% in fiscal 2024 and another 8% in FY25 to $11.64 per share [5] - Mercury General's stock trades at a forward earnings multiple of 15.8X, below the S&P 500's 24.3X and closer to the industry average of 13.6X [5] - Mercury General's EPS is projected to increase over 1000% this year to $4.00, compared to $0.30 in 2023, with FY25 EPS expected to rise another 50% to $6.00 [6] Group 3: Dividend Yields - Both Axis Capital and Mercury General offer annual dividend yields over 2%, significantly higher than the industry average of 0.26% and the S&P 500's 1.24% [8] Group 4: Earnings Estimate Revisions - Earnings estimate revisions for Axis Capital and Mercury General have shown positive trends, indicating potential for further upside [10]