Assurant, Inc. (AIZ)

Total return at 5 years: 11.0%/year = 9.6% appreciation + 1.4% dividend. The target price ($425) is ex-dividend; the $22 in dividends collected over 5 years are added separately.

By both methods, the value today (DCF $648 · Multiples $360) exceeds the market price ($269).

Today — fairly valued: at $269 trades ~25.5% below its value discounted to today (~$360); the discount is positive but does not reach the margin of safety we require (≥38%).

At 5 years — Infravalorado: the target price ($425) plus dividends yield above the required average return (10%) — the business compounds.

The bridge: the return at 5 years exceeds the risk-free rate (4.5%) — but the discount does not reach the required margin of safety (≥38%). To require a 15% annual return, it would need to be bought at ~$226.

Educational / informational. Does not constitute investment advice.

The inverse approach: instead of projecting growth to obtain the value, the market price ($269) is taken as given and it solves for what annual owner-earnings growth would need to hold for 5 years for the present value —at the method's rate (4.5%, no-growth terminal)— to equal that price. It is the disconfirmation test: the expectations the price already pays for, contrasted against the method's projection.

The market discounts less growth (-11.8%/year) than we project (7.0%/year) → if the base case holds, there is margin: perception is more pessimistic than the estimated reality.

That growth implies ~$0.6 bn of owner earnings in year 5 (vs ~$1.5 bn of our base case). It recalculates if the DCF assumptions are edited.

A bank is valued on equity (P/E × common earnings + price/tangible book), not EV: deposits and debt are funding. It returns capital via dividend + buyback —the buyback reduces the share count, so earnings per share grow faster than aggregate earnings—. Total return adds the dividend collected along the way. In edit mode, the metric, shares, dividend, and exit multiple can be adjusted.

Year 0 is the TTM to 30-Jun-2026 (net income US$1.064 billion), with the second quarter of 2026 already ingested into XBRL. The 8-K of 4-Aug-2026 raised the 2026 guidance: adjusted earnings per share ex-catastrophes grow 'mid single digit' on a reported basis and 'approximately 10%' on an underlying basis (excluding favorable prior-year reserve development, PYD, which does not repeat in the second half of 2026). Year +1 of the path uses 8% —between those two anchors— because the TTM already captures part of the first-half jump (net income +50% year over year, driven by low catastrophes and favorable reserve development). The path decelerates geometrically toward 6% in year +5, the durable pace of a niche insurer with a 15-17% ROE and a capital retention rate of approximately 48% after dividends and buybacks (intrinsic growth ≈ ROE × retention). The share count falls ~2.5% a year on net buybacks (TTM buybacks of US$378 million on a market capitalization of US$14.1 billion), consistent with the target of buybacks toward the upper end of the US$300-350 million range declared in the release. Book value per share grows with earnings retained net of dividends and buybacks; ROE moderates from the elevated TTM level (17.4%) toward 15% in steady state. The bear case stresses year 1 with a partial reversal of the catastrophe and reserve development favorability (growth of -3%), and the bull case picks up the sustained 'approximately 10%' scenario from the release itself.

Today's multiple compresses on its own going forward as the metric per share grows (accelerated by the buyback, which reduces the share count). The exit multiple at 3 years is higher than the terminal at 5 years —at 3 years there is more growth still ahead—. Total return adds the dividend collected; the required return is applied to the base scenario.

They are valued separately, with their own rationale, and are not incorporated into the base or the verdict (they are excess return). When assigning them value — in Editmode —, the total with optionalities updates live, without moving the base.

The verdict, the base CAGR, and the margin of safety are always calculated on the base; optionalities do not alter them (with optionalities at $0 they do not move).

Each card fixes a required annual return and answers: if the business is worth $425 in 5 years, what is the maximum that can be paid today to obtain that return? Since it now trades at $269, the margin of safety is how much cheaper the market is than that maximum. The three thresholds: 4% covers inflation (the floor), 10% is the long-term average return, and 15% is the level of a great investment.

With a target price of $425 in 5 years plus $22 of dividends collected (the dividend adds to the return, not to the price) and a required return of 4.5% annually, the maximum to pay today is $360. Against the current market price ($269), the margin of safety is 25.5% (trades below the maximum → there is margin) and the total return at that price would be 11.0% annually.

• Entry multiple. P/E of 13× on normalized TTM earnings, within the 11-15× band of the insurance archetype.
• Estimated 5-year return. +11% annually at market price, Undervalued.
• Margin of safety. It trades at a real discount to value, though short of the required margin of safety.
• Dividend. Current dividend yield of 1.3%, with historical growth of 2.9%-10.8% annually.

• ROE above the bar. ROE of 17.4% over the trailing twelve months, comfortably above the 10% bar and in the excellent tier of the quality scale.
• Earnings predictability. Reported earnings are sensitive to Global Housing's catastrophe cycle and reserve development, introducing quarter-to-quarter volatility.
• Regulated capital. The operating insurers maintain A+/A ratings from A.M. Best, evidence of a solid balance sheet for the business's size.
• Tangible return. ROTCE of ~31% on tangible equity, reflecting a business with significant goodwill from past acquisitions.

Annual levels from the official filing (10-K); the % over each bar is the year-over-year (YoY) growth vs the prior year.

The four drivers show the two full fiscal years available in the verified facts (2024 and 2025) for revenue and adjusted earnings of each segment. Global Housing is the line most sensitive to the catastrophe cycle: its adjusted earnings grew 28% in 2025, with only $198.8 million of reportable catastrophe impact versus $245.2 million in 2024, plus $113 million of favorable reserve development. That favorability is not extrapolated in full into the projected path.

The % are the annual (year-over-year) growth: each year —historical and projected— vs the prior one; the TTM (trailing 12m) vs the TTM of a year ago, to avoid overlapping windows. The historicals are exact figures from the official filings; the projected years come from the year-by-year model (the intermediate years without their own series are interpolated between the anchors). The projected columns (+1y…+5y) are 12-month windows counted from the TTM close (30-jun-2026): the projection starts from the most recently reported data, not the fiscal year. The projected base is realistic and unbiased — the risk discount is applied at the end, via the required return. The rationale for each metric is in the (i).

• Revenue. Consolidated growth of 6.7%-9.4% year over year over the trailing three and a half years, with Global Housing accelerating more than Global Lifestyle recently.
• Raised guidance. The August 4, 2026 release raises guidance for adjusted earnings ex-catastrophes to 'mid-single digit' reported or 'approximately 10%' underlying.
• Single-half sensitivity. Much of the recent acceleration comes from a single half's catastrophe and reserve favorability, not from a structural change verifiable over two years.
• Reinvestment runway. The Home Warranty business and the expansion of the device repair network are the main organic growth levers disclosed.

• Diversified B2B2C model. Two segments with distinct dynamics (managed fees and risk underwriting) reduce dependence on a single growth engine.
• Client concentration. Both segments depend on a small number of large distribution partners (insurers, mortgage lenders).
• Catastrophe exposure. Global Housing is concentrated in areas of high hurricane and flood exposure, partially mitigated by a $1.76 billion reinsurance program.
• Contractual recurrence. Multiyear contracts of 3-5 years provide revenue visibility above a purely transactional business.
• Disintermediation risk. The filing itself acknowledges past cases of clients developing in-house capability and bypassing Assurant.

• ✓Book value compounding+13%/yr · core ROE 20%
• ✓Float return (investment income)$0.6 bn on $23.3 bn of float

A traffic-light interpreted by the method (not generic): float (negative WC) adds up, capex is judged by incremental ROIC (malinvestment test), and a lender is not subjected to corporate solvency. The (i) shows the derivation of each number.

• Leverage. Total debt-to-capital ratio of 27.3% at the close of the second quarter of 2026, moderate for the insurance sector.
• Holding company liquidity. $911 million of liquidity, $686 million above the internal minimum of $225 million.
• Credit rating. Corporate senior debt rated BBB (S&P) and Baa2 (Moody's), both with a stable outlook.
• Regulated capital. A+/A ratings from A.M. Best across most domestic operating insurers.

Who owns the shares — the alignment and whether there is a controlling shareholder.

• Guidance track record. Second consecutive raise to annual guidance in 2026, following record second-quarter results.
• Insider ownership. Directors and executives own less than 1% of shares, a low level of equity skin in the game.
• Capital discipline. Retention of ~48% of earnings after dividends and buybacks, sustaining the regulated capital of the operating insurers.
• Holding company liquidity. $911 million of liquidity at the holding company, $686 million above the stated internal minimum.

• A mid-size company (market value ~$14 billion) with less analyst coverage than the large multiline insurers, and a two-segment model (B2B2C fees + risk underwriting) that makes direct comparison to a single peer group difficult.
• The first-half 2026 result was favored by low catastrophes and favorable reserve development; part of the market may discount that this favorability will not repeat, even though the raised guidance itself already accounts for it in the 'ex-PYD' portion.
• The Home Warranty business within Corporate and Other operates at a widening loss while being organically invested in, which depresses consolidated reported earnings relative to the potential of the two main segments.

It trades at a real discount to value, though short of the required margin of safety. The multiples valuation of 13× on normalized earnings is not an extreme bargain: it reflects a business of solid quality (17.4% ROE, stable moat) with no evident restructuring catalyst. The source of the opportunity, if one exists, is more 'missing buyers' —a niche company, B2B2C complexity, with less coverage than its larger peers— than a forced sale or a one-time event depressing the GAAP result.

The annual return (CAGR at 5 years) in each scenario, with the total period return below — the margin of safety made visual: upside range wide, downside range narrow.

Even in the bear scenario, the return holds at +1%/year (+8% total): the margin of safety protects the downside. The bull (+15%/year, +99% total) exceeds it comfortably — a favorable asymmetry, with a narrow downside range and a wide upside range.

• Client concentration. Dependence on a small number of insurers, mortgage lenders, and loan servicers across both segments.
• Catastrophe cycle. Global Housing is exposed to hurricanes and floods in areas of high geographic concentration.
• Reserve risk. Claims reserves depend on estimates and models that have generated result volatility in the past.
• Technological disruption. Insurtech companies and artificial intelligence threaten to disrupt the established B2B2C model.
• Disintermediation. Large clients may develop in-house capabilities and bypass Assurant, a risk already materialized in the past per the filing itself.

Each thinker's analytical framework applied to our data.

• Buffett / Graham Quality + margin of safety

  A narrow moat and ROE 20% above the 10% bar, but the margin is limited (+25%) → excellent business at a fair price.

• Peter Lynch Growth at a reasonable price (GARP)

  A stalwart growing 7% at a PEG of 1.8 → reasonable for its growth.

• Joel Greenblatt Cheap and high-return (Magic Formula)

  Not applicable — the Magic Formula excludes financials and regulated businesses (EBIT/EV does not capture the operating leverage).

• Howard Marks Perception vs reality + cycle

  The price discounts -12% vs our 7%: perception is more pessimistic than reality, with an identified source of the discount.

• Seth Klarman Capital protection (bear scenario)

  Bear-scenario floor -0%/yr, bull-scenario ceiling +13%/yr over 5y → capital protected, asymmetry in your favor.

• Pat Dorsey Moat strength (Five Rules)

  A narrow moat, stable; sources: intangibles, efficient scale, cost advantage, switching costs → partially passes the Five Rules.

• Aswath Damodaran Expectations implied by the price

  Justifying the price requires discounting -12%, within what we project (7%) — the story squares with the numbers.