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The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Assurant (NYSE:AIZ). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.
Our free stock report includes 1 warning sign investors should be aware of before investing in Assurant. Read for free now.
How Quickly Is Assurant Increasing Earnings Per Share?
If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. That makes EPS growth an attractive quality for any company. Assurant managed to grow EPS by 14% per year, over three years. That's a good rate of growth, if it can be sustained.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. Not all of Assurant's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers used in this article might not be the best representation of the underlying business. While we note Assurant achieved similar EBIT margins to last year, revenue grew by a solid 6.7% to US$12b. That's encouraging news for the company!
You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.
See our latest analysis for Assurant
The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don't exist, you can check our visualization of consensus analyst forecasts for Assurant's future EPS 100% free.
Are Assurant Insiders Aligned With All Shareholders?
We would not expect to see insiders owning a large percentage of a US$9.6b company like Assurant. But we do take comfort from the fact that they are investors in the company. With a whopping US$56m worth of shares as a group, insiders have plenty riding on the company's success. That's certainly enough to let shareholders know that management will be very focussed on long term growth.