2. The Allstate Corporation (NYSE:ALL)
Forward P/E: 10.85
Earnings Growth: 1,396.80%
Number of Hedge Fund Holders: 61
The Allstate Corporation (NYSE:ALL) is an American insurance company that ranks among the best insurance stocks to buy. It offers a wide range of products, including auto, home, renters, business, and life insurance. The Allstate Corporation (NYSE:ALL) is known for its comprehensive protection plans as it provides a wide variety of coverage options for cars, homes, electronic devices, and even identity theft.
A key milestone for The Allstate Corporation (NYSE:ALL) was the acquisition of National General in January 2021 for $4 billion. This strategic move significantly expanded the company’s independent agent channel and added various businesses to its portfolio, including personal auto insurance and group health services. Since the acquisition, The Allstate Corporation (NYSE:ALL) has seen significant growth in customers through independent agents and added nearly 1.7 million policies, achieving a compound annual growth rate (CAGR) of 8% in policies over the past four years. This contributed to over $5.1 billion in premiums written in the first half of 2024.
In Q2 2024, The Allstate Corporation (NYSE:ALL) reported revenues of $15.7 billion, a 12% increase year-over-year, driven by higher insurance premiums and increased investment income. The net income applicable to common shareholders reached $301 million, or an adjusted net income of $1.61 per diluted share.
The Allstate Corporation (NYSE:ALL) reported a 13.1% increase in written premiums compared to Q2 2023. This growth was driven by a 10% rise for the Allstate brand and a remarkable 29.1% increase for National General.
As the company continues to adapt and expand its operations, it presents a strong investment opportunity for those seeking stability and growth in the insurance sector.
Analysts are also bullish on The Allstate Corporation (NYSE:ALL). The 12-month median price target of $215.00 for the stock set by analysts indicates a potential upside of 14% from the current stock price.
ALL ranks second on our list of undervalued insurance stocks to invest in. As of the second quarter of 2024, the stock is held by 61 hedge funds. Ariel Investments stated the following regarding The Allstate Corporation (NYSE:ALL) in its “Ariel Global Fund” second-quarter 2024 investor letter:
“We added property and casualty insurer, The Allstate Corporation (NYSE:ALL). A challenging macro-environment, inflation and lower reserve development led to significant underwriting losses across key markets, presenting us with an attractive entry point. Looking ahead, we expect the strong pricing environment, coupled with lower inflationary pressure and future premium growth to yield upside for shares. Additionally, management is committed to improving its adjusted expense ratio and recently made upgrades to its claims handling processes to minimize loss development and lower claim severities.”
