Here's Why Investors Should Retain Verisk (VRSK) Stock For Now
Verisk (VRSK) is continuing its investments in people, data sets, analytic solutions, technology and complementary businesses.
Verisk Analytics, Inc.’s VRSK shares have had an impressive run on the bourses over the past six months. The stock gained 26.6%, significantly outperforming the 20.7% growth of the Zacks S&P 500 composite.
The company has an expected long-term earnings per share (three to five years) growth rate of 10.2%. Its earnings are expected to increase 2.4% in 2021 and 15.3% in 2022, year over year.
Verisk Analytics, Inc. Price
Factors That Bode Well
Acquisitions form a key part of Verisk’s growth strategy. It has been continuously acquiring and investing in companies globally to expand its data and analytics capabilities across industries. In March 2021, Verisk acquired assets and capabilities of 4C Solutions to expand into the group life insurance market. In 2020, the company had acquired Franco Signor, which became a part of its Claims Partners business and is helping it strengthen its foothold in the Medicare space.
Verisk continues to invest in people, data sets, analytic solutions, technology and complementary businesses with a view to keep itself updated with changing requirements in the markets it serves. The company is maintaining its focus on increasing solution penetration with customers, developing new proprietary data base and predictive analytics, and expanding into new customer sectors.
Verisk has a consistent record of returning value to its shareholders. In 2020, the company repurchased shares worth $348.8 million and paid $175.8 million in dividends. Previously, in 2019, 2018 and 2017, the company had repurchased shares worth $300 million, $438.6 million and $276.3 million, respectively. Such moves not only instill investors’ confidence on the stock, but also positively impact earnings per share.
Debt Woe Stays
Verisk’s cash and cash equivalent balance of $276 million at the end of second-quarter 2021 was well below the long-term debt level of $2.7 billion, underscoring that the company does not have enough cash to meet this debt burden. The cash level cannot even meet the short-term debt of $403 million.
Zacks Rank and Stocks to Consider
Verisk currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term expected earnings per share (three to five years) growth rate for ManpowerGroup, Equifax and Genpact is pegged at 24.2%, 15.2% and 14.7%, respectively.
Tech IPOs With Massive Profit Potential: Last years top IPOs surged as much as 299% within the first two months. With record amounts of cash flooding into IPOs and a record-setting stock market, this year could be even more lucrative.See Zacks’ Hottest Tech IPOs 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
ManpowerGroup Inc. (MAN): Free Stock Analysis Report
Equifax, Inc. (EFX): Free Stock Analysis Report
Genpact Limited (G): Free Stock Analysis Report
Verisk Analytics, Inc. (VRSK): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research