Compelling Reasons to Hold on to Markel Group Stock for Now

Markel Group Inc. MKL remains well-poised to gain from the new business volume, solid retention levels, improving rate environment, strategic acquisitions, as well as effective capital deployment. Higher return on capital, favorable growth estimates and the affordability of the stock are other positives.With a market capitalization of $21.94 billion, the average volume of shares traded in the last three months was 0.04 million.Earnings of Markel Group grew 46.2% in the last five years, better than the industry average of 14.5%. MKL has a solid surprise history. It surpassed earnings estimates in two of the last four quarters while missing in the other two, the average being 35.42%.MKL’s Zacks Rank & Price PerformanceMarkel Group currently carries a Zacks Rank #3 (Hold).The stock has gained 20.7% in the past year against the industry’s decline of 10%. The Zacks Finance sector and the S&P 500 composite rose 21.9% and 26.8%, respectively, in the same time frame.MKL Price PerformanceImage Source: Zacks Investment ResearchMarkel Group’s Growth Projection EncouragesThe Zacks Consensus Estimate for Markel Group’s 2025 earnings per share and revenues indicates a year-over-year increase of 12.6% and 6.1%, respectively, from the corresponding 2024 estimates.Optimistic Analyst Sentiment on MKLOne of the six analysts covering the stock has raised estimates for 2025 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 moved 0.06% north in the last 30 days.MKL’s Solid Return on CapitalMKL’s return on invested capital (ROIC) has increased every year. This reflects MKL’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 7.5%, higher than the industry average of 4.4%.MKL Trades Above 50-Day and 200-Day Moving AveragesThis stock is currently closed at $1,706.12 and is trading above its 50-day and 200-day simple moving averages (SMA) of $1,692.02 and $1,592.11, respectively, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.Markel Group Shares are UndervaluedMarkel Group is trading at a discount compared with the industry average. It presents a compelling investment opportunity with its attractive forward 12-month price-to-book ratio of 1.33X, lower than the industry average of 3.85X. Its pricing, at a discount to the industry average, gives a better entry point to investors. Also, it has a Value Score of B.Factors Benefiting MKL StockMKL has been generating improved premiums. An improvement in new business volume, strong retention levels, continued increases in rates and expanded product offerings should help the insurer retain the momentum.Investment income should continue to benefit from an improving rate environment, higher interest income on cash equivalents, fixed maturity securities and short-term investments due to higher yields.Markel Group considers strategic buyouts, a prudent approach to ramp up its growth profile. Acquisitions have helped the company enhance its surety capabilities, ramp up Markel Ventures’ revenues and expand its reinsurance product offerings. The insurer has been pursuing acquisitions to achieve profitable growth in insurance operations and create additional value on a diversified basis in Markel Ventures’ operations.Higher revenues at construction services and transportation-related businesses due to a combination of increased demand, higher prices and growth, as well as a rise in production at one of the equipment manufacturing businesses, are expected to boost operating revenues. The increase also reflected a full-year contribution from Metromont.Markel Group also has a VGM Score of B. Stocks with a favorable VGM Score are those with the most attractive value, best growth and most promising momentum compared with peers.Distribution of WealthBanking on a strong capital position, the company engages in share buybacks, a prudent way to distribute wealth to its shareholders. However, it presently prefers to invest in organic growth initiatives for its Insurance business. The company has a share repurchase program authorized by the board to buy back up to $750 million of shares. As of Sept. 30, 2024, $332.1 million remained available for repurchases under the program. Also, given its solid cash position of $3.9 billion, the company should not face any difficulty in meeting short-term obligations.Key PicksInvestors interested in finance stocks may look at some better-ranked players like W.R. Berkley Corporation WRB, Palomar Holdings, Inc. PLMR and The Travelers Companies, Inc. TRV, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for W.R. Berkley’s 2025 earnings per share and revenues implies year-over-year growth of 9.6% and 7.9%, respectively. It beat earnings estimates in each of the past four quarters, with an average surprise of 7.10%. In the past year, shares of WRB have risen 19.4%.The Zacks Consensus Estimate for Palomar Holdings’ 2025 earnings per share and revenues implies year-over-year growth of 23.1% and 27%, respectively. It beat earnings estimates in each of the past four quarters, with an average surprise of 14.9%. In the past year, shares of PLMR have rallied 88%.The Zacks Consensus Estimate for The Travelers’ 2025 earnings per share and revenues implies year-over-year growth of 9.1% and 7.4%, respectively. It beat earnings estimates in three of the past four quarters and missed in one, with an average surprise of 25.4%. In the past year, shares of TRV have gained 25.8%.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Travelers Companies, Inc. (TRV): Free Stock Analysis Report W.R. Berkley Corporation (WRB): Free Stock Analysis Report Markel Group Inc. (MKL): Free Stock Analysis Report Palomar Holdings, Inc. (PLMR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks