Aegon (AEG) Plans to Repurchase Shares From Vereniging Aegon
Aegon Ltd. AEG recently announced that it has entered into an agreement with Vereniging Aegon to participate in its current share repurchase program. Vereniging Aegon, a majority shareholder in AEG, will partially participate in the program, and the buyback is expected to start as AEG completes the repurchase of EUR 750 million worth of shares.
The pro-rata participation of Vereniging Aegon will result in the buyback of shares worth EUR 139.5 million based on its combined common shares and common shares B voting rights. The total number of shares will depend on volume weighted daily average price of AEG’s shares on the Euronext Amsterdam exchange.
Aegon’s current share buyback program of EUR 1.5 billion was announced on Jul 6, 2023, and as of Dec 7, 2023, AEG has repurchased shares worth EUR 703.9 million. This program is expected to run through Jun 30, 2024. The agreement to buy shares from Vereniging Aegon is also scheduled to run through the same time as the original share buyback plan.
Aegon’s continued efforts to deploy capital by means of share repurchases and dividends are expected to increase shareholders’ value in the future. The company had previously completed the buyback of shares worth EUR 200 million on Jun 2, 2023, and intends to continue buying shares occasionally to return capital to its shareholders. Share repurchases are a good sign for investors as it implies the company’s belief that its shares are undervalued. Moreover, less shareholder capital implies higher earnings per share, enhancing shareholder value.
The company also undertakes other measures, such as divestitures, to focus on its core operations. Further plans to divest less profitable operations are expected to continue replenishing AEG’s capacity to carry out capital deployment in the future. AEG expects to increase its cash flow to EUR 800 million and increase its dividend to EUR 0.40 by 2025. This should increase investors' confidence in the company’s prospects.
Price Performance
Aegon shares have gained 11.3% in the year-to-date period compared with the 0.2% rise of the industry it belongs to.
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Zacks Rank & Key Picks
Aegon currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the multi-line insurance space are Assurant, Inc. AIZ, Everest Group, Ltd. EG and Goosehead Insurance, Inc GSHD. Each stock presently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Assurant’s 2023 earnings has improved 2.6% over the past 30 days. During this time, AIZ has witnessed one upward estimate revision against none in the opposite direction. It beat earnings estimates in each of the past four quarters, with an average surprise of 42.4%.
The Zacks Consensus Estimate for Everest Group’s 2023 earnings indicates 105.3% year-over-year growth. EG beat earnings estimates thrice in the past four quarters and missed once, with an average surprise of 24.5%.
The Zacks Consensus Estimate for Goosehead Insurance’s 2023 earnings suggests 150.9% year-over-year growth. Also, the consensus mark for GSHD’s 2023 revenues implies a 27.6% year-over-year increase. GSHD beat earnings estimates thrice in the past four quarters and missed once, with an average surprise of 100.4%.
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