This is a step-by-step stock review to answer the question, is Allstate Insurance (ALL) stock a good buy?
This article will teach you how to use the 4Ms of investing. This will be a detailed walkthrough to show you how the 4Ms work and why they are important. If you are interested, you can log into Tykr to use the 4M Confidence Booster (Powered by OpenAI) which will allow you to complete a 4M Analysis in less than 60 seconds.
What are the 4Ms?
- MOS (Margin of Safety) – The MOS is the math part of investing which includes the Summary, Score, and MOS (Margin of Safety).
- Meaning – The meaning is the business model and how scalable the revenue streams are.
- Moat – The moat is how the business compares to other companies in the same Sector and Industry.
- Management – The management is the track record of the CEO.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
Table of Contents
The following links will direct you to key topics to help answer the question, is Allstate Insurance (ALL) stock a good buy?
- Allstate Insurance Company History
- MOS
- Meaning
- Moat
- Management
- 4M Score
- Is Allstate Insurance (ALL) stock a good buy?
1. Allstate Insurance Company History
- Founded: 1931 by Sears, Roebuck and Co. as a part of its catalog business.
- Initial Focus: Auto insurance, targeting affordability and customer service.
- Independence: Became a separate entity from Sears in 1993.
- Growth: Expanded to offer a wide range of insurance products, including home, life, and business.
- Major Acquisitions: Acquired Esurance in 2011 and National General Holdings in 2020 to broaden its market reach.
- Innovation: Pioneered the use of telematics with Drivewise, promoting safe driving.
- Current Status: One of the largest publicly held insurance companies in the U.S., serving millions of customers nationwide.
- Headquarters: Located in Northbrook, Illinois.
2. MOS (Margin Of Safety)
When investing in a company, the first step is to look at the financials. Fortunately, Tykr does this for us automatically. The higher the score, the stronger the financials and the safer the investment. The higher the MOS, the higher the potential returns you can make.
- Summary: On Sale
- Score: 56
- MOS: 74%
To see the most up-to-date Summary, Score, and MOS, please log into Tykr.
3. Meaning
When investing in a company, it’s important to know how a company makes money. A mature business model has multiple streams of revenue which allow the company to weather downturns in the economy.
Here is how Allstate Insurance makes money:
- Insurance Premiums: Collects payments from customers for various types of insurance policies, such as auto, home, and life insurance.
- Investments: Earns income by investing the premiums received from policyholders in stocks, bonds, and other financial instruments.
- Underwriting: Makes money by assessing risk and setting premiums at levels that exceed the cost of claims paid out.
- Fees: Charges fees for certain services, such as policy changes and administrative tasks.
- Reinsurance: Receives payments from reinsurance companies for sharing some of the risk and costs of large claims.
- Esurance (2011)
- National General Holdings (2020)
- SquareTrade (2016)
- The Hartford’s Personal Lines Business (2009)
4. Moat
When investing in a company, it’s important to understand how a company ranks against other companies in the same sector and industry. Based on the Score, here is how Allstate Insurance stacks up against other companies.
- Kinsale Capital Group, Inc.(KNSL) – 95
- The Progressive Corporation.(PGR) – 89
- White Mountains Insurance Group, Ltd.(WTM) – 84
- HCI Group, Inc.(HCI) – 84
- Chubb Limited.(CB) – 84
- The Allstate Corporation.(ALL) – 56
To see the most up-to-date Summary, Score, and MOS and each stock, please log into Tykr.
5. Management
When investing in a company, it’s important to understand who the CEO is, what they have accomplished in the past, and how they have helped this company grow. Good leaders typically have stronger cultures, less turnover, and better returns in the stock market.
- CEO Leadership (2007): Wilson became CEO in 2007, guiding Allstate through significant changes in the insurance industry and economic challenges.
- Digital Transformation: He led Allstate’s digital transformation, introducing innovative tools and platforms like the Drivewise program, which offers usage-based insurance and leverages telematics technology.
- Expansion of Product Offerings: Wilson expanded Allstate’s product portfolio beyond traditional insurance, including investments in emerging areas like digital protection and identity theft services.
- Financial Resilience: Under his leadership, Allstate improved its financial performance, focusing on profitability and shareholder returns while navigating the company through the 2008 financial crisis and subsequent market shifts.
- Commitment to Diversity: Wilson championed diversity, equity, and inclusion initiatives within the company, fostering a more inclusive workplace culture and enhancing Allstate’s reputation as a socially responsible company.
6. 4M Score
All of our homework on this company leads up to the 4M Score. A lot of investors only look at the numbers. Yes, it’s important to look at the first M (MOS) which is the math part of investing but it’s also important to look past the numbers and also look at the Meaning, Moat, and Management. If all 4Ms pass, we should have high confidence in buying this stock.
What 4M score are we going for?
- 80-100 = High confidence – Yay! You should have high confidence buying this stock. It passes all 4M!
- 60-79 = Moderate confidence – Alert! There may be better stocks in the market. Only buy this stock if you truly believe the company will improve!
- 0-59 = Low confidence – Warning! There are better stocks in the market. Due to the low score, you should consider looking at other stocks.
👉 The 4M Score of Allstate Insurance (ALL) is 83/100.
To see the most up-to-date 4M Score, please log into Tykr.
7. Is Allstate Insurance (ALL) stock a good buy?
Some of the top questions investors can have is Allstate Insurance (ALL) stock a good buy or should I buy Allstate Insurance (ALL) stock?
Allstate Insurance (ALL) is a solid investment choice due to its strong market presence and comprehensive insurance offerings. Under CEO Thomas J. Wilson, Allstate has focused on digital transformation and customer-centric innovations, such as the Drivewise program, which enhances user engagement and risk management. The company’s broad product range, including auto, home, and life insurance, provides diversified revenue streams. Allstate’s financial stability and strategic focus on growth and efficiency contribute to its investment appeal. However, challenges include competitive pressures and potential impacts from economic fluctuations and regulatory changes. Overall, Allstate’s strong brand, financial resilience, and innovative strategies make it a promising investment opportunity.
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To truly know if Allstate Insurance is a good stock to buy or sell, we recommend you log into Tykr. Within seconds you can see the Summary, Score, MOS, and 4M Score.
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The Summary, Score, and MOS of this stock may have changed since the posting of this review. Please login to Tykr to see up-to-date information.