Yahoo Finance Here's Why Hold Strategy is Apt for Reinsurance Group (RGA)
Reinsurance Group of America, Incorporated RGA has been benefiting from higher new business volumes of closed longevity business, favorable claims experience, sufficient liquidity as well as prudent capital deployment.
Growth Projections
The Zacks Consensus Estimate for Reinsurance Group’s 2023 earnings is pegged at $15.80, indicating a 9.5% increase from the year-ago reported figure on 3.6% higher revenues of $17.38 billion. The consensus estimate for 2024 earnings is pegged at $17.09, indicating an 8.1% increase from the year-ago reported figure on 4.8% higher revenues of $18.22 billion.
Earnings Surprise History
Reinsurance Group has a solid track of beating earnings estimates in four of the last seven quarters.
Zacks Rank & Price Performance
Reinsurance Group currently carries a Zacks Rank #3 (Hold). The stock has increased 18.6% in the past year against the industry’s decline of 18.5%.
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Style Score
Reinsurance Group has a VGM Score of B. VGM Score helps identify stocks with the most attractive value, best growth and the most promising momentum.
Return on Equity
Reinsurance Group’s return on equity of 9.2% expanded 1630 basis points (bps) year over year. In the fourth quarter of 2022, the adjusted operating return on equity (excluding accumulated other comprehensive income) was 10.3%, expanded 950 bps year over year. This shows the company’s relative efficiency in managing shareholders’ funds.
Business Tailwinds
Solid performance at its U.S. and Latin America, Canada, Europe, Middle East and Africa (EMEA) as well as the Asia Pacific segments is likely to drive Reinsurance Group.
The EMEA segment is well poised to grow from higher investments supporting the annuity business and an increase in new business volumes of the closed longevity business.
The U.S. Asset-Intensive business should continue to gain from higher transaction and other fees, favorable longevity experience and equity markets as well as higher variable investment income from commercial loan prepayments.
Its Asia Pacific business is likely to grow from favorable claims experience, the continued growth of Financial Solutions Reinsurance, higher investment income and investment-related benefits. Contributions from recently executed asset-intensive transactions in Asia should benefit the top line of the Asia Pacific business.
The Canada business should continue to gain from higher business volume under existing treaties, increased variable investment income and a higher invested asset base.
The life insurer boasts a strong balance sheet with a stable capital mix. RGA exited the fourth quarter of 2022 with excess capital of around $1.2 billion.
Reinsurance Group undertakes shareholder-friendly moves on the back of its solid financial strength. RGA hiked its dividend at an eight-year (2016-2023) CAGR of 10.1%. It currently yields 2.4%.
Stocks to Consider
Some better-ranked stocks from the life insurance industry are Brighthouse Financial, Inc. BHF, Primerica Inc. PRI and Sun Life Financial Inc.SLF.
Brighthouse Financial’s earnings surpassed estimates in three of the last four quarters and missed in one, the average being 2.07%. In the past year, BHF has lost 18.8%.
The Zacks Consensus Estimate for BHF’s 2023 and 2024 earnings indicates a respective year-over-year increase of 33.5% and 11.5%. The insurer sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Primerica’s earnings surpassed estimates in two of the last four reported quarters while missing in other two. In the past year, PRI has gained 20.2%.
The Zacks Consensus Estimate for PRI’s 2023 and 2024 earnings indicates a respective year-over-year increase of 29.4% and 11.5%. Currently, the insurer flaunts a Zacks Rank #1.
Sun Life’s earnings surpassed estimates in each of the last four quarters, the average being 9.14%. In the past year, SLF has lost 19.1%.
The Zacks Consensus Estimate for SLF’s 2024 earnings implies a year-over-year rise of 8.1%. The insurer carries a Zacks Rank #2 (Buy) at present.
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Reinsurance Group of America, Incorporated (RGA) : Free Stock Analysis Report
Primerica, Inc. (PRI) : Free Stock Analysis Report
Sun Life Financial Inc. (SLF) : Free Stock Analysis Report
Brighthouse Financial, Inc. (BHF) : Free Stock Analysis Report
