Everest Re Group, Ltd. RE is well-poised for growth owing to new business opportunities, lower combined ratio and improved leverage ratio.
The company has a favorable VGM Score of B. VGM Score helps to identify stocks with the most attractive value, best growth and the most promising momentum.
The stock has seen its estimates for 2022 move up 3.4% in the past 30 days, reflecting analyst optimism.
Premium income of Everest Re got a boost as a result of focus on new business opportunities, improved terms and conditions and rate levels, expanded shares on attractive renewals and high retention rates on existing book, discipline cycle management, strong rate in target classes and improving activity in certain lines of business across its Reinsurance and Insurance segments.
Premium growth, continued focus on expense management and improved underlying combined ratio, loss and expense ratio at both the segments are likely to benefit the company in the long term.
The property and casualty insurer boasts a solid balance sheet with high liquidity and improving leverage. Its debt to capital of 16.4% betters the industry average of 20.6%. Riding on growing premiums and modest level of claims paid, it generated record operating cash flows in 2020.
Furthermore, its times interest earned, a measure to identify the company ability to service debt, of 17.1 is good compared with the industry’s average of 12.4, implying that its earnings are sufficient to cover interest obligations.
This property and casualty insurer raised its dividend at a seven-year (2014-2021) CAGR of 10.9%. The dividend adjusted book value per share grew over 11% in 2020. It remains focused on delivering superior growth in book value per share over the market cycle. Its current dividend yield of 2.6% is better than the industry average of 0.6%, which makes the stock an attractive pick for yield-seeking investors.
Shares of this Zacks Rank #3 (Hold) property and casualty insurer have gained 24.6% in a year’s time, compared with the industry’s increase of 39.7%. We expect the company’s policy to ramp up its growth profile and capital position to drive the shares higher.
The Zacks Consensus Estimate for 2021 and 2022 earnings per share is pegged at $24.77 and $28.69, indicating year-over-year increase of 232% and 15.8%, respectively.
Stocks to Consider
Some better-ranked stocks in the insurance space include Alleghany Y, Cincinnati Financial CINF and First American Financial FAF, 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 (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%.
First American Financial’s bottom line surpassed estimates in three of the last four quarters and missed in one, the average beat being 15.86%.
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