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Why Should You Hold Reinsurance Group (RGA) in Your Portfolio?
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Reinsurance Group of America, Incorporated (RGA - Free Report) is well-poised for growth, driven by solid variable investment income, higher in in-force business, sufficient liquidity and prudent capital deployment.
It has a decent earnings surprise history too. Its earnings beat estimates in three of the last four quarters. It has a trailing four-quarter earnings surprise of 67.86%, on average.
The company is well poised to gain from solid performances across its segments, U.S. and Latin America, Canada Operations, Europe, Middle East and Africa and Asia Pacific segments.
By virtue of growth in life reinsurance in force, organic growth, new sales, new individual life business production, increase in in-force business, new in-force block transaction, increase in business volume on new and existing treaties, new business as well as in-force growth in Asian markets, and new asset-intensive transactions in Asia, the insurer’s premium income is likely to improve.
Higher variable investment income and strong equity markets benefited the asset intensive business.
Considering higher invested asset base from business growth, and solid variable investment income from real estate joint ventures and limited partnerships, investment income is expected to improve despite the current low interest rate environment.
Reinsurance Group has a strong balance sheet and is well-positioned to withstand COVID-19 impacts and take advantage of emerging opportunities. Its excess capital position at the end of the year was approximately $1.3 billion. Reinsurance Group 's leverage ratios remain stable at the end of the year while its liquidity remains strong with cash and cash equivalents of $3.4 billion.
Its approach to capital deployment during the crisis remained prudent, disciplined and balanced. Its dividend payments have witnessed a seven-year CAGR (2014-2021) of 12.9% and currently yields 3%. These make the stock appealing to yield-seeking investors.
Moreover, shares of this life insurer, currently carrying a Zacks Rank #3 (Hold), have rallied 93.2% in the past year compared with the industry’s increase of 57.2%.
The Zacks Consensus Estimate for 2021 and 2022 earnings per share is pegged at $10.87 and $14.06, indicating year-over-year increase of nearly 44.1% and 29.4%, respectively.
Alleghany’s bottom line surpassed estimates in two of the last four quarters and missed in the other two, the average beat being 34.08%.
Cincinnati Financial surpassed earnings estimates in two of the last four quarters, with the average surprise being 4.10%.
Sun Life’s bottom line surpassed estimates in each of the last four quarters, the average beat being 18.19%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Why Should You Hold Reinsurance Group (RGA) in Your Portfolio?
Reinsurance Group of America, Incorporated (RGA - Free Report) is well-poised for growth, driven by solid variable investment income, higher in in-force business, sufficient liquidity and prudent capital deployment.
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It has a decent earnings surprise history too. Its earnings beat estimates in three of the last four quarters. It has a trailing four-quarter earnings surprise of 67.86%, on average.
The company is well poised to gain from solid performances across its segments, U.S. and Latin America, Canada Operations, Europe, Middle East and Africa and Asia Pacific segments.
By virtue of growth in life reinsurance in force, organic growth, new sales, new individual life business production, increase in in-force business, new in-force block transaction, increase in business volume on new and existing treaties, new business as well as in-force growth in Asian markets, and new asset-intensive transactions in Asia, the insurer’s premium income is likely to improve.
Higher variable investment income and strong equity markets benefited the asset intensive business.
Considering higher invested asset base from business growth, and solid variable investment income from real estate joint ventures and limited partnerships, investment income is expected to improve despite the current low interest rate environment.
Reinsurance Group has a strong balance sheet and is well-positioned to withstand COVID-19 impacts and take advantage of emerging opportunities. Its excess capital position at the end of the year was approximately $1.3 billion. Reinsurance Group 's leverage ratios remain stable at the end of the year while its liquidity remains strong with cash and cash equivalents of $3.4 billion.
Its approach to capital deployment during the crisis remained prudent, disciplined and balanced. Its dividend payments have witnessed a seven-year CAGR (2014-2021) of 12.9% and currently yields 3%. These make the stock appealing to yield-seeking investors.
Moreover, shares of this life insurer, currently carrying a Zacks Rank #3 (Hold), have rallied 93.2% in the past year compared with the industry’s increase of 57.2%.
The Zacks Consensus Estimate for 2021 and 2022 earnings per share is pegged at $10.87 and $14.06, indicating year-over-year increase of nearly 44.1% and 29.4%, respectively.
Stocks to Consider
Some better-ranked stocks in the insurance space include Alleghany , Cincinnati Financial (CINF - Free Report) and Sun Life Financial Inc. (SLF - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Alleghany’s bottom line surpassed estimates in two of the last four quarters and missed in the other two, the average beat being 34.08%.
Cincinnati Financial surpassed earnings estimates in two of the last four quarters, with the average surprise being 4.10%.
Sun Life’s bottom line surpassed estimates in each of the last four quarters, the average beat being 18.19%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>