AIZ Stock Trading at a Discount to Industry at 1.9X: Time to Hold?

Assurant, Inc. AIZ shares are trading at a discount compared with the Zacks Multi-line Insurance industry. Its forward price-to-book value of 1.9X is lower than the industry average of 2.25X, the Finance sector’s 4.13X, and the Zacks S&P 500 composite’s 8.14X. The stock has a Value Score of A. This style score helps find the most attractive value stocks. 

The insurer has a market capitalization of $11.16 billion. The average volume of shares traded in the last three months was 0.4 million. The insurer has a solid track record of beating earnings estimates in each of the past four quarters, with an average of 20.36%.

Shares of Axis Capital Holdings Limited AXS, First American Financial Corporation FAF and RenaissanceRe Holdings Ltd. RNR are also trading at a discount to the industry average.

The stock closed at $222.91 on Friday, and trading above the 200-day simple moving average (SMA) of $215.36, indicating solid upward momentum. The SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data.

AIZ is an Outperformer

Shares of AIZ have gained 8.5% in the past year against the industry’s decline of 1.6%.

AIZ’s Growth Projection Encourages

The Zacks Consensus Estimate for Assurant’s 2026 earnings per share (EPS) indicates a year-over-year increase of 6.5%. The consensus estimate for revenues is pegged at $13.63 billion, implying a year-over-year improvement of 6.1%. 

The consensus estimate for 2027 EPS and revenues indicates an increase of 6.9% and 6.4%, respectively, from the corresponding 2026 estimates. 

Earnings of Assurant grew 17.3% in the last five years, better than the industry average of 9.9%.

Average Target Price for AIZ Suggests Upside

Based on short-term price targets offered by six analysts, the Zacks average price target is $261.33 per share. The average suggests a potential 15% upside from the last closing price.

Assurant’s Favorable Return on Capital

Return on equity in the trailing 12 months was 18.6%, better than the industry average of 15.4%. This highlights the company’s efficiency in utilizing shareholders’ funds. 

Also, the return on invested capital (ROIC) has been increasing over the last few quarters as the company raised its capital investment over the same time frame, reflecting AIZ’s efficiency in utilizing funds to generate income. ROIC in the trailing 12 months was 12.1%, better than the industry average of 2%.

Key Points to Note for AIZ

Assurant’s focus on growing fee-based, capital-light businesses, which account for 52% of segmental revenues, bodes well for growth. Management estimates that the contribution from the same will continue to grow in double digits over the long term. 

Within Connected Living, AIZ continues to support long-term growth through the development of innovative offerings for partners. U.S. Connected Living is poised for solid growth, particularly within the mobile protection business, riding on innovative offerings, customer experience expertise and improved relationships with mobile carriers and cable operators.  

Homeowners’ top-line growth, more favorable loss experience from prior-period development on claims, growth in policies in-force and higher average premiums within lender-placed, as well as growth across various specialty products, should drive better results at Global Housing. For 2026, AIZ expects Global Housing adjusted EBITDA, excluding reportable catastrophes, to decrease, with solid underlying growth when excluding $113 million of prior year reserve development in 2025.

Global Lifestyle growth is expected to be driven by Connected Living, supported by growth in global mobile device protection and a new financial services program, along with inorganic and organic growth strategies. For 2026, Global Lifestyle adjusted EBITDA is projected to increase in the high single digits with contributions from Connected Living and Global Automotive. 

The insurer remains focused on ramping up the Connected Living platform, deploying innovative products and services, and adding new partnerships. These initiatives are expected to double the margins of Connected Living to 8% over the long term.

AIZ’s Capital Deployment

Assurant has a solid capital management policy. It expects to deploy capital to fund investments, mergers and acquisitions. Liquidity was $887 million as of Dec. 31, 2025, which was $662 million higher than the company’s current targeted minimum level of $225 million. In November 2025, the board approved a dividend hike of 10%, which is the 21st consecutive year of increase. As of Dec. 31, 2025, $745 million remains under the current repurchase authorizations. AIZ expects 2026 repurchases to be in the range of $250 million to $350 million, subject to M&A as well as market and other conditions. This represents an increase from last year's range of $200 million to $300 million.

Conclusion

Focus on capital-light businesses, Homeowners growth and Connected Living growth within the mobile protection business should favor Assurant’s results. Higher return on capital, favorable growth estimates and attractive valuations should continue to benefit the insurer over the long term. 

Assurant 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. Its impressive dividend history as well as attractive valuations are other positives.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research