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Here's Why You Should Retain Everest Re (RE) in Your Portfolio
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Everest Re Group, Ltd. has been gaining momentum, given by new business opportunities, higher limited partnership income and higher income from other invested assets.
Growth Projections
The Zacks Consensus Estimate for Everest Re’s 2022 and 2023 earnings per share is pegged at $33.2 and $38.3, indicating a respective year-over-year increase of 14.7% and 15.4%. The expected long-term earnings growth rate is 10.1%.
Earnings Surprise History
Everest Re has a decent earnings surprise history. It beat estimates in two of the last four quarters and missed in the other two, with the average being 24.72%.
Zacks Rank
Everest Re currently carries a Zacks Rank #3 (Hold).
Style Score
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.
Return on Equity
Everest Re’s trailing 12-month return on equity (ROE) was 11.5%, up 830 basis points year over year and compares favorably with the industry average of 5.9%. ROE reflects its efficiency in using shareholders’ funds.
Business Tailwinds
Solid performance across the Reinsurance and Insurance operations segments of Everest Re is likely to drive revenues in the days ahead.
Increased exposure and new business opportunities with the recovery of the U.S. economy, continued double-digit rate increases, expanded share on attractive renewals, and strong renewal retention are likely to boost the growth of Reinsurance and Insurance operations.
Higher income from a fixed-income portfolio, increase in limited partnership income, higher dividend income from equity portfolio, and increased income from other invested assets are likely to drive the net investment income.
Riding on disciplined execution and intentional portfolio management, the loss ratio, commission ratio and expense ratio are expected to improve. The reinsurance expense ratio is estimated to remain under 3% for 2022.
Capital Position
Everest Re boasts a solid balance sheet and continues to optimize the capital structure with the $1 billion senior notes offering completed in early October. The financial leverage was 20.2% by the end of 2021. The insurer expects to maintain the ratio within the 15% to 20% strategic plan assumption range by the end of 2023. Banking on strong premium growth, operating cash flow is likely to improve.
Solid Capital Deployment
Banking on solid cash flow, the insurer increased dividends at a nine-year CAGR (2014-2022) of 8.4%. The dividend yield is 2.2%, better than the industry average of 0.3%, making the stock an attractive pick for yield-seeking investors.
Price Performance
In the past year, the stock has rallied 18.9% compared with the industry’s increase of 24.1%.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, United Fire has declined 9.4%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 30 days.
The bottom line of Cincinnati Financial surpassed earnings estimates in each of the last four quarters, the average being 38.48%. In the past year, the insurer has rallied 25.3%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 30 days.
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 33.9%.
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 4.9% and 1.5% north, respectively, in the past 60 days. W.R. Berkley’s expected long-term earnings growth rate is pegged at 9%.
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Here's Why You Should Retain Everest Re (RE) in Your Portfolio
Everest Re Group, Ltd. has been gaining momentum, given by new business opportunities, higher limited partnership income and higher income from other invested assets.
Growth Projections
The Zacks Consensus Estimate for Everest Re’s 2022 and 2023 earnings per share is pegged at $33.2 and $38.3, indicating a respective year-over-year increase of 14.7% and 15.4%. The expected long-term earnings growth rate is 10.1%.
Earnings Surprise History
Everest Re has a decent earnings surprise history. It beat estimates in two of the last four quarters and missed in the other two, with the average being 24.72%.
Zacks Rank
Everest Re currently carries a Zacks Rank #3 (Hold).
Style Score
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.
Return on Equity
Everest Re’s trailing 12-month return on equity (ROE) was 11.5%, up 830 basis points year over year and compares favorably with the industry average of 5.9%. ROE reflects its efficiency in using shareholders’ funds.
Business Tailwinds
Solid performance across the Reinsurance and Insurance operations segments of Everest Re is likely to drive revenues in the days ahead.
Increased exposure and new business opportunities with the recovery of the U.S. economy, continued double-digit rate increases, expanded share on attractive renewals, and strong renewal retention are likely to boost the growth of Reinsurance and Insurance operations.
Higher income from a fixed-income portfolio, increase in limited partnership income, higher dividend income from equity portfolio, and increased income from other invested assets are likely to drive the net investment income.
Riding on disciplined execution and intentional portfolio management, the loss ratio, commission ratio and expense ratio are expected to improve. The reinsurance expense ratio is estimated to remain under 3% for 2022.
Capital Position
Everest Re boasts a solid balance sheet and continues to optimize the capital structure with the $1 billion senior notes offering completed in early October. The financial leverage was 20.2% by the end of 2021. The insurer expects to maintain the ratio within the 15% to 20% strategic plan assumption range by the end of 2023. Banking on strong premium growth, operating cash flow is likely to improve.
Solid Capital Deployment
Banking on solid cash flow, the insurer increased dividends at a nine-year CAGR (2014-2022) of 8.4%. The dividend yield is 2.2%, better than the industry average of 0.3%, making the stock an attractive pick for yield-seeking investors.
Price Performance
In the past year, the stock has rallied 18.9% compared with the industry’s increase of 24.1%.
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Stocks to Consider
Some better-ranked insurers include United Fire Group, Inc. (UFCS - Free Report) , Cincinnati Financial Corporation (CINF - Free Report) and W.R. Berkley Corporation (WRB - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
United Fire’s earnings surpassed estimates in each of the last four quarters, the average earnings surprise being 275.45%. In the past year, United Fire has declined 9.4%.
The Zacks Consensus Estimate for UFCS’ 2022 and 2023 earnings has moved 122.2% and 76.9% north, respectively, in the past 30 days.
The bottom line of Cincinnati Financial surpassed earnings estimates in each of the last four quarters, the average being 38.48%. In the past year, the insurer has rallied 25.3%.
The Zacks Consensus Estimate for Cincinnati Financial’s 2022 and 2023 earnings has moved 5.7% and 5.5% north, respectively, in the past 30 days.
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 33.9%.
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved 4.9% and 1.5% north, respectively, in the past 60 days. W.R. Berkley’s expected long-term earnings growth rate is pegged at 9%.