Stocks aren't like children. Some can be favored more than others without feeling guilty about it or causing family problems.

There's no doubt that Warren Buffett has some favorites among the 41 holdings in Berkshire Hathaway's portfolio. And one of Buffett's favorite stocks just became more attractive to investors.

A Buffett favorite

For a while, Buffett didn't want anyone to know how much he liked Chubb Limited (CB -0.21%). Berkshire Hathaway secured approval from the Securities and Exchange Commission to keep its initial purchases of the big property and casualty (P&C) insurer confidential last year.

Like in every Scooby-Doo TV episode, though, the mystery was eventually solved. Berkshire's regulatory filing in May 2024 revealed that Buffett had been aggressively buying shares of Chubb.

Today, Berkshire owns 6.7% of Chubb. The insurance stock is Buffett's ninth-largest holding with a market value in the ballpark of $7.7 billion.

It's not hard to figure out what Buffett likes about Chubb. He understands the company's business -- an important criterion for the legendary investor. After all, insurance is a core part of Berkshire's operations. Buffett also likes Chubb's valuation. Even after soaring nearly 40% over the last 12 months, the stock's forward earnings multiple is only 11.9.

An even better stock now

So why is this Buffett favorite even more attractive to investors now? We only have to look at three statements made by Chubb chairman and CEO Evan Greenberg in the company's press release announcing its third-quarter results on Tuesday.

First, Greenberg noted that his company's core operating income increased 14.3% year over year in Q3 with earnings per share jumping 15.6%. This performance stemmed from double-digit growth in Chubb's P&C underwriting as well as in its investment income. In other words, Chubb is firing on all cylinders.

Second, Greenberg said Chubb's book and tangible book value per share rose 11.1% and 16.7% year to date, respectively. He added in the same sentence that the company's core operating return on equity (ROE) is 13.6%. Book value isn't as much of a focus for investors as it was in the past, but Chubb's improvement is great news. Many investors do pay close attention to ROE, though, and Chubb's ROE continues to grow.

Third, Chubb's CEO stated, "Our P&C underwriting results in the quarter were excellent, with strong contributions from all divisions though it was an active quarter for industrywide catastrophe losses [italics added]." I italicized Greenberg's comment about the catastrophic losses for P&C insurers in Q3 because it underscores that Chubb delivered an impressive performance despite facing significant headwinds (both figuratively and literally).

Keeping the momentum going

Can the good times keep rolling for Chubb? I think so. So does Greenberg. He said in the company's press release:

Notwithstanding the fact that we are in the risk business, with so many opportunities and avenues for growth globally, we remain confident in our ability to continue growing our operating earnings and EPS at a superior rate through P&C revenue growth and underwriting margins, investment income, and life income.

In Buffett's annual letter to Berkshire Hathaway shareholders released in 2014, he revealed how he picks stocks. The legendary investor first determines if he can estimate earnings for a company for at least five years in the future. He only buys a stock if he can do so and the stock trades at a reasonable price relative to this estimate.

Chubb didn't become a top 10 holding for Berkshire without meeting both criteria. I think Buffett can check off both boxes with even more confidence now. Chubb is clearly demonstrating it can grow earnings. Its valuation remains attractive. This stock could become an even bigger favorite for Buffett (and plenty of other investors) going forward.