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Everest Re's (RE) Prospects Look Bright: Should You Hold?
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Shares of Everest Re Group, Ltd. gained 3.43% since the release of first-quarter 2017 results, outperforming the Zacks categorized Property and Casualty Insurance industry’s increase of 0.01%. Also, the company witnessed full-year 2017 and 2018 estimates moving north by nearly 8.5% and 0.5%, respectively, over the last 60 days. We expect the stock to retain the momentum owing to a number of positives.
Everest Re’s Insurance segment has been witnessing an improvement in gross premiums written riven by initiatives like product diversification and expansion of the property insurance geographic footprint. We expect such strategic initiatives to drive premiums higher.
Moreover, Mt. Logan Re – one of the key growth drivers of the property and casualty (P&C) insurer – has displayed significant improvement in Asset Under Management (AUM) and remains the fastest growing capital market vehicle. Increase in AUM will help the company execute and enhance its long-term capital management and business strategy.
In addition, the company remains well poised to benefit from its capital adequacy, financial flexibility, long-term operating performance and traditional risk management capabilities. Everest Re’s prudent capital management strategy and robust capital balance position should help it to continue dividend payouts and share buybacks.
Valuation is also attractive at present as the stock is currently trading at a price to book multiple of 1.22, a 12.9% discount to the industry average of 1.40. Also, Everest Re has a trailing 12-month return on equity (ROE) of 12.7%, which is higher than the industry average of 6.5%.
However, exposure to catastrophe losses remains a concern for the company as this lends volatility to earnings.
The long-term earnings growth is currently pegged at 10%. Also, the price earnings growth ratio, which determines the relative trade-off among the price of a stock, the earnings generated per share, and the company's expected growth, is 1.48. This is better than the industry average is 1.68.
The company also carries a VGM Score of A. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics.
Zacks Rank
Currently, Everest Re carries a Zacks Rank #3 (Hold).
CNA Financial offers commercial P&C insurance products, primarily in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 12.45%.
Infinity Property and Casualty provides personal automobile insurance products in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 37.45%.
ProAssurance Corporation offers P&C insurance, and reinsurance products in the United States. The company delivered positive surprises in all of the last four quarters with an average beat of 16.59%.
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Everest Re's (RE) Prospects Look Bright: Should You Hold?
Shares of Everest Re Group, Ltd. gained 3.43% since the release of first-quarter 2017 results, outperforming the Zacks categorized Property and Casualty Insurance industry’s increase of 0.01%. Also, the company witnessed full-year 2017 and 2018 estimates moving north by nearly 8.5% and 0.5%, respectively, over the last 60 days. We expect the stock to retain the momentum owing to a number of positives.
Everest Re’s Insurance segment has been witnessing an improvement in gross premiums written riven by initiatives like product diversification and expansion of the property insurance geographic footprint. We expect such strategic initiatives to drive premiums higher.
Moreover, Mt. Logan Re – one of the key growth drivers of the property and casualty (P&C) insurer – has displayed significant improvement in Asset Under Management (AUM) and remains the fastest growing capital market vehicle. Increase in AUM will help the company execute and enhance its long-term capital management and business strategy.
In addition, the company remains well poised to benefit from its capital adequacy, financial flexibility, long-term operating performance and traditional risk management capabilities. Everest Re’s prudent capital management strategy and robust capital balance position should help it to continue dividend payouts and share buybacks.
Valuation is also attractive at present as the stock is currently trading at a price to book multiple of 1.22, a 12.9% discount to the industry average of 1.40. Also, Everest Re has a trailing 12-month return on equity (ROE) of 12.7%, which is higher than the industry average of 6.5%.
However, exposure to catastrophe losses remains a concern for the company as this lends volatility to earnings.
The long-term earnings growth is currently pegged at 10%. Also, the price earnings growth ratio, which determines the relative trade-off among the price of a stock, the earnings generated per share, and the company's expected growth, is 1.48. This is better than the industry average is 1.68.
The company also carries a VGM Score of A. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three metrics.
Zacks Rank
Currently, Everest Re carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks from the same space include CNA Financial Corporation (CNA - Free Report) , Infinity Property and Casualty Corporation and ProAssurance Corporation (PRA - Free Report) . Each of these stocks holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
CNA Financial offers commercial P&C insurance products, primarily in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 12.45%.
Infinity Property and Casualty provides personal automobile insurance products in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 37.45%.
ProAssurance Corporation offers P&C insurance, and reinsurance products in the United States. The company delivered positive surprises in all of the last four quarters with an average beat of 16.59%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look. See the pot trades we're targeting>>