A sturdy business if ever there was one, veteran insurance company Chubb (CB -0.41%) has generally been a solid if unspectacular performer on the stock market over its lifetime. The company posts revenue growth that's high for such an established business, tends to land well in positive territory on the bottom line, and has consistently paid -- and raised -- its dividend.
It's been on a bumpy ride so far this year, though, with many investors turning away from "defensive" stocks at the start of the second calendar quarter. Let's pick apart how Chubb has done over a recent stretch of time.
40%-plus gain
A $1,000 outlay on Chubb stock made at this point in 2022 would be worth $1,428 right now (accounting for both share price appreciation and dividend payments). That's a bit below the $1,516 that an investment into the S&P 500 index would have reaped.
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Prior to this year, Chubb had tended to outpace that stock market benchmark a bit; a reliable quarterly payout and constant profitability have a tendency to do that.
Early this year, however, several factors combined to drive investors from safety stocks like Chubb into riskier plays.
Out of fashion
A thriving stock market, which was in evidence at the end of the first quarter, made investors hungry for the higher returns riskier assets (like cryptocurrencies) might provide. The trade war seemed to be ebbing, with the Trump administration backing off from, or delaying, certain levies on foreign exporters.
Chubb is many things, but a volatile, high-risk equity play it is not. It hasn't fully recovered since the defensive stock exodus.
This leaves it something of a bargain, in my view. Its forward P/E now lies under 13, which is slim for a company with high net margins, and good trailing and anticipated revenue growth rates (projected to rise by over 4% in full-year 2025, according to the consensus analyst estimate). While Chubb isn't the most thrilling investment, it's a reliable and productive one, and to me, that makes it a buy.
