Everest Re Hits 52 Week-High on Q2 Revenue Beat & Growth
On Sep 2, 2014, shares of Everest Re Group Ltd. (RE) rallied up to reach a 52-week high of $166.56. The momentum is believed to have been driven by the company’s revenue beat as well as year-over-year growth in the second quarter along with the recent rating affirmation from A.M. Best.
The company’s shares gained 21.3% in the one-year period to close at $165.46 in the last trading session. Other industry players like W.R. Berkley Corp. (WRB) and Endurance Specialty Holdings Ltd. (ENH) gained 18.9% each over the past one year.
Growth Drivers
Everest Re’s total revenue of $1.45 billion came in above the Zacks Consensus Estimate of $1.42 billion. On a year-over-year basis, revenues grew 7.2% on higher premium earned and net realized capital gains, partly offset by lower net investment income.
However, Everest Re’s earnings missed the Zacks Consensus Estimate by 5.9% but were up 6.1% year over year. The improvement in operating results was driven by continued growth in underwriting gains, offset by declining investment income results.
Despite the current quarter’s earnings miss, the average positive surprise over the past four quarters is 5.77%.
Everest Re’s investment grade issuer credit rating was also affirmed by A.M.Best in July. This was in acknowledgement of the company’s superior risk-adjusted capital position, consistency in generating favorable earnings, managerial expertise, strong risk management framework and a niche presence in the insurance and reinsurance market.
The stock also garners investors’ attention because of its attractive dividend which it has been paying uninterruptedly since 1995. Continuing its steady dividend payouts, Everest Re announced that it will disburse its quarterly dividend of 75 cents to its shareholders on or before Sep 10, 2014. In Nov 2013, the company increased its quarterly cash dividend by 56% to 75 cents per share from 48 cents per share paid earlier.
Everest Re carries a Zacks Rank # 3 (Hold). A better-ranked player is Federated National Holding Company (FNHC). It sports a Zacks Rank #1 (Strong Buy).
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