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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 Performance
Markel 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 Performance
Image Source: Zacks Investment Research
Markel Group’s Growth Projection Encourages
The 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 MKL
One 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 Capital
MKL’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 Averages
This 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 Undervalued
Markel 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 Stock
MKL 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.