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Reinsurance Group (RGA) Rises 17% YTD: Will the Rally Last?
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Reinsurance Group of America, Incorporated’s (RGA - Free Report) shares have gained 17.2% year to date, outperforming the industry’s increase of 17.1% and the Finance sector’s rise of 11.1%. With a market capitalization of $11 billion, the average volume of shares traded in the last three months was 0.4 million.
Higher new business volumes, better pricing, favorable longevity experience, stronger invested asset base, business expansion in the pension risk transfer market, solid in-force business ensuring predictable long-term earnings and effective capital deployment continue to drive this Zacks Rank #2 (Buy) insurer.
This leading global provider of traditional life and health reinsurance and financial solutions has a decent surprise history, delivering an earnings surprise in the three reported quarters of 2023. Earnings of this insurer increased 16.5% in the last five years.
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 1.9% and 4.7% north, respectively, in the past 30 days, reflecting analysts’ optimism.
Reinsurance Group is poised for progress, which is evident from its favorable VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Return on equity, reflecting how efficiently a company is utilizing shareholders’ funds, is 17.4%, better than the industry average of 14.8%.
Image Source: Zacks Investment Research
Will the Bull Run Continue?
Reinsurance Group boasts a leadership position in the United States, Latin America and Canada by virtue of its compelling product portfolio and operational expertise.
Significant value embedded in the in-force business is anticipated to generate predictable long-term earnings. Product line expansion contributes to risk diversification and matured individual mortality, providing a base for stable earnings and capital generation.
Longevity insurance provides a source of diversified income, as well as acts as a hedge to a large mortality position. Increasing demand for longevity insurance is expected to drive long-term growth for the product.
Life insurers are direct beneficiaries of an improving interest rate environment. RGA’s high-quality investment portfolio is well-positioned as it remains diversified across asset classes, sectors, issuers and geography. Though the Fed has stalled rate increases for some time, it has already made 11 hikes since 2022.
RGA’s solid capital position with excess capital of around $1.1 billion offers sufficient financial flexibility and supports effective capital deployment. While the insurer raised its dividend by 6.3% in August 2023, it also has $200 million remaining under its authorization.
The stocks are trading at a price to book value of 1.4, lower than the industry average of 1.7. It has a Value Score of A. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 offer better returns.
American Equity delivered a trailing four-quarter average earnings surprise of 13.53%. The stock has gained 21.6% year to date. The Zacks Consensus Estimate for AEL’s 2024 earnings has moved 2.8% higher in the past 30 days.
Primerica delivered a trailing four-quarter average earnings surprise of 7.87%. The stock has surged 50% year to date. The Zacks Consensus Estimate for PRI’s 2024 earnings has moved 0.2% higher in the past 30 days.
Horace Mann delivered a trailing four-quarter average earnings surprise of 19.30%. The stock has lost 9.6% year to date. The Zacks Consensus Estimate for HMN’s 2024 earnings indicates a 122.2% year-over-year increase.
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Reinsurance Group (RGA) Rises 17% YTD: Will the Rally Last?
Reinsurance Group of America, Incorporated’s (RGA - Free Report) shares have gained 17.2% year to date, outperforming the industry’s increase of 17.1% and the Finance sector’s rise of 11.1%. With a market capitalization of $11 billion, the average volume of shares traded in the last three months was 0.4 million.
Higher new business volumes, better pricing, favorable longevity experience, stronger invested asset base, business expansion in the pension risk transfer market, solid in-force business ensuring predictable long-term earnings and effective capital deployment continue to drive this Zacks Rank #2 (Buy) insurer.
This leading global provider of traditional life and health reinsurance and financial solutions has a decent surprise history, delivering an earnings surprise in the three reported quarters of 2023. Earnings of this insurer increased 16.5% in the last five years.
The Zacks Consensus Estimate for 2023 and 2024 earnings has moved 1.9% and 4.7% north, respectively, in the past 30 days, reflecting analysts’ optimism.
Reinsurance Group is poised for progress, which is evident from its favorable VGM Score of A. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Return on equity, reflecting how efficiently a company is utilizing shareholders’ funds, is 17.4%, better than the industry average of 14.8%.
Image Source: Zacks Investment Research
Will the Bull Run Continue?
Reinsurance Group boasts a leadership position in the United States, Latin America and Canada by virtue of its compelling product portfolio and operational expertise.
Significant value embedded in the in-force business is anticipated to generate predictable long-term earnings. Product line expansion contributes to risk diversification and matured individual mortality, providing a base for stable earnings and capital generation.
Longevity insurance provides a source of diversified income, as well as acts as a hedge to a large mortality position. Increasing demand for longevity insurance is expected to drive long-term growth for the product.
Life insurers are direct beneficiaries of an improving interest rate environment. RGA’s high-quality investment portfolio is well-positioned as it remains diversified across asset classes, sectors, issuers and geography. Though the Fed has stalled rate increases for some time, it has already made 11 hikes since 2022.
RGA’s solid capital position with excess capital of around $1.1 billion offers sufficient financial flexibility and supports effective capital deployment. While the insurer raised its dividend by 6.3% in August 2023, it also has $200 million remaining under its authorization.
The stocks are trading at a price to book value of 1.4, lower than the industry average of 1.7. It has a Value Score of A. This style score helps find the most attractive value stocks. Back-tested results have shown that stocks with a Value Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 offer better returns.
Other Stocks to Consider
Some other top-ranked stocks from the insurance space are American Equity Investment Life Holding , Primerica (PRI - Free Report) and Horace Mann Educators (HMN - Free Report) , each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
American Equity delivered a trailing four-quarter average earnings surprise of 13.53%. The stock has gained 21.6% year to date. The Zacks Consensus Estimate for AEL’s 2024 earnings has moved 2.8% higher in the past 30 days.
Primerica delivered a trailing four-quarter average earnings surprise of 7.87%. The stock has surged 50% year to date. The Zacks Consensus Estimate for PRI’s 2024 earnings has moved 0.2% higher in the past 30 days.
Horace Mann delivered a trailing four-quarter average earnings surprise of 19.30%. The stock has lost 9.6% year to date. The Zacks Consensus Estimate for HMN’s 2024 earnings indicates a 122.2% year-over-year increase.