This Cheap Stock Is Rated A “Strong Buy” And Should Be On Your Radar

US stocks are headed higher over the long run. How do I know? The Dow Jones Industrial Average was around 200 points back in 1950. It’s now coming up on 34,000 points. The US stock market compounds at an annual rate of nearly 10% over the long term.

It’s almost relentless.

Now, that’s an average – some years are exceptional, while others are poor. But too much focus on near-term volatility can cause you to miss the forest for the trees. What’s even more impressive is that some stocks can actually outpace this long-term average. High-quality dividend growth stocks are such a group.

These stocks represent equity in world-class enterprises that produce reliable, rising profits from providing the world with the products and/or services it demands.

Allstate Corp. (ALL) is an insurance company that operates as one of the largest property-casualty insurers in the United States.

Founded in 1931, Allstate is now a $38 billion (by market cap) insurance titan that employs more than 42,000 people.

Allstate primarily sells auto and homeowners insurance.

Property-casualty net underwriting premiums accounted for the vast majority of the company’s FY 2020 revenue. Of these premiums, they can be broken down into the following lines: auto insurance, 70%; homeowners, 23%; other personal lines, 5%; and commercial, 2%.

After the announcement that the company will be selling off its Allstate Life Insurance Company in 2021, its primary focus moving forward will be in property-casualty insurance.

Insurance has long been one of my very favorite business models.

It’s the very definition of making money from OPM (“other people’s money”).

Since most people can’t afford to cover catastrophic losses, they buy insurance to mitigate risk. You have built-in demand for something that almost sells itself.

An insurance company collects premiums upfront for shouldering that risk.

These premiums turn into a “float” and can earn significant returns during the time delay between premium collection and claim payout. This float is built entirely upon OPM.

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Disclaimer: Please consult with a licensed investment professional before investing any of your money. Never invest in a security or idea featured on this channel unless you can afford to lose ...

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