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Everest Re (RE) Rises 25.8% in a Year: More Room for Growth?
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Shares of Everest Re Group, Ltd. have gained 25.8% in a year outperforming the industry's increase of 15.8%. The Zacks S&P 500 composite has rallied 14.1% in the said time frame. With a market capitalization of $11.9 billion, the average volume of shares traded in the last three months was 0.2 million.
Image Source: Zacks Investment Research
The rally was largely driven by new business generation, solid cash position and rate increases.
The insurer has a decent earnings surprise history. Its bottom line beat estimates in two of the last four quarters and missed in the other two, the average being 24.7%.
Everest Re has a favorable VGM Score of A. VGM Score helps to identify stocks with the most attractive value, best growth and the most promising momentum.
Will the Bull Run Continue?
Estimates for 2022 have moved up nearly 2% in the past seven days, reflecting investors’ optimism.
The Zacks Consensus Estimate for 2022 and 2023 earnings per share is pegged at $33.44 and $38.52, respectively, indicating a year-over-year increase of nearly 15.4% and 15.2%, respectively.
The expected long-term earnings growth rate is 10.8%, higher than the industry average of 10.1%.
Strong new business generation in casualty and professional liability lines, exposure growth from the economic recovery as well as continued double-digit rate increases are expected to drive the performance of the Insurance segment of Everest Re.
The Reinsurance segment of the insurer accounted for the lion’s share of premium growth in 2021. Continued partnerships with core clients, international operations as well as Everest’s position as a preferred reinsurer, coupled with strong underlying rate movement are expected to drive the performance of this segment.
The insurer’s annualized net income return on equity (ROE) was 12.2%, which expanded 800 basis points year over year. ROE reflects its efficiency in using its shareholders’ funds.
In 2021, Everest generated solid operating cash flow, riding on strong premium growth. The capital position continued to remain strong with high-quality invested assets, significant liquidity and a low operating expense ratio.
The property and casualty insurer expects the reinsurance expense ratio to remain under 3% for 2022.
Banking on solid cash flow, the insurer increased dividends at a seven-year CAGR (2014-2021) of 10.9%. The dividend yield is 2.1%, better than the industry average of 0.3%, making the stock an attractive pick for yield-seeking investors.
Everest Re currently carries a Zacks Rank #1 (Strong Buy) and has an impressive Value Score of A. The stock remains undervalued at the current level. RE currently has a trailing 12-month price-to-book value ratio of 1.19, lower than the industry average of 1.39.
Back-tested results show that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best opportunities in the value investing space.
Arch Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 35.84%. In the past year, ACGL has rallied 32.4%.
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 2.9% and 1.6% north, respectively, in the past seven days. Arch Capital’s expected long-term earnings growth rate is pegged at 10%.
W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.53%. In the past year, WRB has rallied 32.6%.
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 4.9% and 1.5% north, respectively, in the past 30 days. W.R. Berkley’s expected long-term earnings growth rate is pegged at 9%.
The bottom line of American Financial surpassed earnings estimates in each of the last four quarters, the average being 39.58%. In the past year, the insurer has rallied 26.4%.
The Zacks Consensus Estimate for American Financial’s 2022 earnings has moved 0.5% north in the past seven days.
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Everest Re (RE) Rises 25.8% in a Year: More Room for Growth?
Shares of Everest Re Group, Ltd. have gained 25.8% in a year outperforming the industry's increase of 15.8%. The Zacks S&P 500 composite has rallied 14.1% in the said time frame. With a market capitalization of $11.9 billion, the average volume of shares traded in the last three months was 0.2 million.
Image Source: Zacks Investment Research
The rally was largely driven by new business generation, solid cash position and rate increases.
The insurer has a decent earnings surprise history. Its bottom line beat estimates in two of the last four quarters and missed in the other two, the average being 24.7%.
Everest Re has a favorable VGM Score of A. VGM Score helps to identify stocks with the most attractive value, best growth and the most promising momentum.
Will the Bull Run Continue?
Estimates for 2022 have moved up nearly 2% in the past seven days, reflecting investors’ optimism.
The Zacks Consensus Estimate for 2022 and 2023 earnings per share is pegged at $33.44 and $38.52, respectively, indicating a year-over-year increase of nearly 15.4% and 15.2%, respectively.
The expected long-term earnings growth rate is 10.8%, higher than the industry average of 10.1%.
Strong new business generation in casualty and professional liability lines, exposure growth from the economic recovery as well as continued double-digit rate increases are expected to drive the performance of the Insurance segment of Everest Re.
The Reinsurance segment of the insurer accounted for the lion’s share of premium growth in 2021. Continued partnerships with core clients, international operations as well as Everest’s position as a preferred reinsurer, coupled with strong underlying rate movement are expected to drive the performance of this segment.
The insurer’s annualized net income return on equity (ROE) was 12.2%, which expanded 800 basis points year over year. ROE reflects its efficiency in using its shareholders’ funds.
In 2021, Everest generated solid operating cash flow, riding on strong premium growth. The capital position continued to remain strong with high-quality invested assets, significant liquidity and a low operating expense ratio.
The property and casualty insurer expects the reinsurance expense ratio to remain under 3% for 2022.
Banking on solid cash flow, the insurer increased dividends at a seven-year CAGR (2014-2021) of 10.9%. The dividend yield is 2.1%, better than the industry average of 0.3%, making the stock an attractive pick for yield-seeking investors.
Everest Re currently carries a Zacks Rank #1 (Strong Buy) and has an impressive Value Score of A. The stock remains undervalued at the current level. RE currently has a trailing 12-month price-to-book value ratio of 1.19, lower than the industry average of 1.39.
Back-tested results show that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best opportunities in the value investing space.
Other Stocks to Consider
Some other top-ranked property and casualty insurers include Arch Capital Group (ACGL - Free Report) , W.R. Berkley (WRB - Free Report) and American Financial Group (AFG - Free Report) . While Arch Capital sports a Zacks Rank #1, American Financial and W.R. Berkley carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Arch Capital’s earnings surpassed estimates in each of the last four quarters, the average beat being 35.84%. In the past year, ACGL has rallied 32.4%.
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 2.9% and 1.6% north, respectively, in the past seven days. Arch Capital’s expected long-term earnings growth rate is pegged at 10%.
W.R. Berkley’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 27.53%. In the past year, WRB has rallied 32.6%.
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 4.9% and 1.5% north, respectively, in the past 30 days. W.R. Berkley’s expected long-term earnings growth rate is pegged at 9%.
The bottom line of American Financial surpassed earnings estimates in each of the last four quarters, the average being 39.58%. In the past year, the insurer has rallied 26.4%.
The Zacks Consensus Estimate for American Financial’s 2022 earnings has moved 0.5% north in the past seven days.