Estimates for RenaissanceRe Holdings Ltd. (RNR - Free Report) have been revised upward over the past 30 days, reflecting brokers’ confidence in the stock. The stock has seen the Zacks Consensus Estimate of $10.70 for 2018 and $10.90 for 2019 move 7.8% and 1.3% north, respectively.
RenaissanceRe provides reinsurance and insurance coverages in the United States and around the globe. Shares of this Zacks Rank #3 (Hold) company have lost 0.6% in the past six months, significantly narrower than its industry’s decline of nearly 8.8%.
Now let’s quickly glance through the factors that make RenaissanceRe stock an investor favorite.
Positive Earnings Surprise History: The company flaunts an encouraging earnings surprise history, having outpaced the Zacks Consensus Estimate in three of the trailing four quarters with an average beat of 17.66%. This uptick is indicative of the company’s operational excellence.
Improving Top Line: The company has been witnessing increasing gross premiums written, backed by premium growth at both the Casualty and Specialty and Property segments. The company witnessed a three-year CAGR of 21.74% since 2014.
Inorganic Growth: RenaissanceRe has been actively undertaking divestitures in order to streamline its operations by eradicating low-return high-risk businesses. The company sold its U.S.-based weather and weather-related energy risk management unit. It is also acquiring and expanding businesses to boost growth opportunities. The company recently bought Platinum Underwriters that helped strengthening its U.S. Specialty and Casualty reinsurance platform. It will continue with its strategic M&A activity going forward.
Capital Deployment: In order to add shareholder value, the company has been aggressively deploying its excess capital over the past many quarters via continuous dividend hikes. The company also buys back shares to enhance shareholder value. These continuous efforts are likely to retain investor confidence in the stock.
Valuation: Shares of RenaissanceRe are underpriced at the moment and the value remains attractive for investors. The company has a trailing 12-month price-to-book ratio of 1.22, lower than the industry average of 1.37.
Stocks to Consider
Some better-ranked stocks from the property and casualty segment are The Progressive Corporation (PGR - Free Report) , First American Financial Corporation (FAF - Free Report) and American Financial Group, Inc. (AFG - 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.
Progressive Corporation offers personal and commercial auto insurance, residential property insurance and other specialty property-casualty insurance and related services, primarily in the United States. It exceeded estimates in three of the last four quarters with an average earnings surprise of 6.23%.
First American and its subsidiaries provide financial services. The company delivered an average four-quarter positive surprise of 8.33%.
American Financial provides property and casualty insurance products in the United States. The company managed to pull off an average trailing four-quarter beat of 26.66%.
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