Markel Group Inc. (MKL): A Bull Case Theory
Is Progressive Corporation (PGR) the Best Low Volatility Stock to Buy Now?
A team of accountants in a boardroom, discussing strategic moves of an insurance company.
Markel Corporation, often dubbed a 'mini-Berkshire,' is a diversified insurance holding company with three main segments: specialty insurance, public and private investments, and a collection of non-insurance operating businesses called Markel Ventures. Its core insurance business focuses on long-tail excess and surplus lines, consistently generating underwriting profits in 8 of the last 9 years, though it has lagged peers in recent profitability improvements—especially in reinsurance. Markel Ventures, a $5.1 billion revenue operation with a 12.5% EBITDA margin, spans industries from construction services to consumer products and now contributes 40–50% of consolidated earnings. Despite the segment's strong performance, limited financial disclosures raise concerns among investors. On the investment side, Markel's public equity portfolio, managed by CEO Tom Gayner, grew to $11.8 billion by 2024 and includes high-quality names like Berkshire Hathaway. However, it has underperformed broader market indices by 100–150 basis points over 5–10 years. With $13.1 billion in net cash and investments—or $1,025 per share—this sum makes up over half of Markel's market cap, although not all of it is excess capital due to regulatory requirements.
The stock's underperformance has caught the attention of activist investors, including JANA Partners, who have urged a separation of the insurance and Ventures businesses to unlock value. Markel's management has acknowledged areas needing improvement, particularly insurance, stating that improved results here are essential for the company's long-term potential. Capital allocation has shifted significantly in recent years. After spending $4.2 billion on acquisitions between 2015–2021, Markel deployed $8.8 billion into its investment portfolio since 2021. Share buybacks have also increased meaningfully, reaching $573 million in 2024—though still modest relative to its $23 billion market cap.
Valuation remains a core topic. Markel uses a two-part intrinsic value estimate based on operating earnings and net asset value, applying a conservative 12x multiple to normalized earnings. As of year-end 2024, this approach yielded an intrinsic value of $2,610 per share, up 18% CAGR over five years, versus just a 9% CAGR in stock price. Alternatively, with $1.94 billion in earnings and $13.1 billion in net investments, the stock trades at an implied 5.1x multiple, suggesting meaningful undervaluation. With operational tailwinds in Ventures, strategic pressure to unlock asset value, and visible capital deployment into buybacks, Markel presents a compelling investment opportunity with multiple levers for upside if execution improves—especially in insurance.
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MKL Stock Trading at a Discount to Industry at 1.53X: Time to Hold?
Markel Group Inc. MKL shares are trading at a discount compared with the Zacks Diversified Operations industry. Its price-to-book ratio of 1.53X is lower than the industry average of 7.08X, the Finance sector's 7.08X and the Zacks S&P 500 Composite's 8.42X. The stock has a Value Score of has a market capitalization of $25.29 billion. The average volume of shares traded in the last three months was 0.05 million. Markel Group's bottom line surpassed earnings in three of the last four quarters and missed in one, the average being 11.26%. Image Source: Zacks Investment Research Shares of Markel Group have surged 26.7% in the past year, outperforming its industry, and the Finance sector and the Zacks S&P 500 composite's growth of 6.1%, 18.2% and 11.8%, Group has outperformed its peers, ITT Inc. ITT and Honeywell International Inc. HON, which have risen 19.1% and 10.2%, respectively, in the past year. Meanwhile, shares of Carlisle Companies Incorporated CSL have lost 2.4% in the past year. Image Source: Zacks Investment Research Shares of Markel Group are trading above the 50-day and 200-day simple moving averages (SMAs) of $1,927.94 and $21,788.82, indicating solid upward momentum. SMA is a widely used technical analysis tool to predict future price trends by analyzing historical price data. Its share price as of July 10, 2025, was $1,994.16, down 3.3% from its 52-week high of $2,063.68. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Markel Group's 2025 earnings per share indicates a year-over-year increase of 18.1%. The consensus estimate for revenues is pegged at $15.21 billion, implying a year-over-year improvement of 2.6%. The consensus estimate for 2026 earnings per share and revenues implies an increase of 11.5% and 6.3%, respectively, from the corresponding 2025 have grown 23.1% in the past five years, better than the industry average of 15.6%. One of the four analysts covering the stock hasve raised estimates for 2025, while one of the five analysts has lowered the same for 2026 over the past 30 days. Thus, the Zacks Consensus Estimate for 2025 and 2026 earnings has moved up 0.5% and 0.4%, respectively, in the past 30 days. Image Source: Zacks Investment Research Return on equity in the trailing 12 months was 7.48%, underperforming the industry average of 36.59%. Return on equity, a profitability measure, reflects how effectively a company is utilizing its shareholders' funds. Thus, MKL's ROE is lagging the industry average. 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 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 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' 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. Banking on a strong capital position, the company engages in share buybacks, a prudent way to distribute wealth to its shareholders. MKL has a share repurchase program, authorized by the board, that provides for the repurchase of up to $2 billion of shares. Also, given its solid cash position of $4.2 billion, the company should not face any difficulty in meeting short-term obligations. 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3 strong names with 'more room to run' in 2025
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Better Growth Stock: Markel vs. Berkshire Hathaway
Berkshire Hathaway has an incredible history of performance behind it. Relatively small Markel's business model is fashioned after Berkshire Hathaway's approach. Berkshire Hathaway is so large that future growth could be harder to achieve. 10 stocks we like better than Berkshire Hathaway › Warren Buffett and Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), the company he runs, hold a special place in Wall Street history because of the incredible returns provided to investors. But change is in the air now that Buffett is set to retire. And after a long stretch of strong performance, Berkshire Hathaway is now a very large business. Growth investors thinking about buying the stock might want to consider Markel (NYSE: MKL) instead. Here's why. The Berkshire Hathaway that most people know actually began as a failed investment. Warren Buffett bought into the company in 1962 and took it over in 1965 with the idea of turning the one-time shirt maker around. That didn't work. However, the Oracle of Omaha took that lemon and made fine wine out of it, because he used the Berkshire Hathaway shell to create one of the strongest performing conglomerates on Wall Street. The chart above shows why investors follow Buffett and his investment team's moves so closely. Berkshire Hathaway's returns over time have literally trounced those of the S&P 500 (SNPINDEX: ^GSPC). One interesting feature here is that Berkshire Hathaway doesn't pay a dividend, so it is a pure growth investment. And still, the S&P 500, which includes many stocks that do pay dividends, can't seem to compete. The big story around Berkshire Hathaway right now, however, isn't about performance. It is the news that Buffett is retiring as CEO at the end of the year. While he has likely trained his replacement, Greg Abel, in his investment approach, there is no telling if anyone can really fill Buffett's shoes. Complicating this is the not-so-subtle fact that Berkshire Hathaway is a gargantuan company with a $1 trillion market cap and a sprawling collection of businesses under its corporate umbrella. Buffett himself has warned that growth will be harder to achieve in the future. Markel isn't shy about the fact that it is attempting to imitate Buffett and Berkshire Hathaway. Like Berkshire, Markel owns an insurance company, a portfolio of owned businesses, and a collection of publicly traded stocks. That said, Markel is much, much smaller, with a market cap of "just" $25 billion. Like Berkshire it does not pay a dividend, so the story is all about growth. Markel hasn't performed nearly as well as Berkshire Hathaway of late. But that has resulted in a management shakeup at Markel that the company hopes will lead to improved performance. Given the size differences, it will probably be easier to return Markel to growth than it will be to simply keep growth going at giant Berkshire Hathaway. And this is where a longer-term performance graph comes into play. Markel has actually outperformed Berkshire Hathaway over the long term. To be fair, the share price pullback at Berkshire Hathaway following the announcement of Buffett's retirement has helped on that front. But the real takeaway is that Markel is a fast-growing company that has, like Berkshire, handily bested the S&P 500 index. If you are a fan of Berkshire Hathaway and Warren Buffett, you should consider doing a deep dive into Markel. Don't get too caught up on Markel's recent laggard performance, even good companies go through difficult periods. Given the changes taking place at Berkshire and the size of the company, growth investors may be better off with Markel and its blatant copycat approach. Before you buy stock in Berkshire Hathaway, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Berkshire Hathaway wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $966,931!* Now, it's worth noting Stock Advisor's total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 23, 2025 Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway and Markel Group. The Motley Fool has a disclosure policy. Better Growth Stock: Markel vs. Berkshire Hathaway was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
