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Everest Re Gains 17% Year to Date: What's Aiding the Stock?

Zacks Equity Research

Everest Re Group Ltd.’s RE shares have gained 16.9% year to date, outperforming the industry's rise of 8.9%. With market capitalization of $10.7 billion, average volume of shares traded in the last three months was 0.3 million.



What’s Behind the Upside?

The Zacks Rank #3 (Hold) property and casualty insurer has been pursuing strategic initiatives to ramp up its growth profile.

Growth at its Insurance operations should continue to be backed by product diversification, growth of the existing Canadian platform, international insurance expansion and staffing up underwriting operations among others.

Everest Re opened European operating platform to expand global underwriting operation. Operations in the Lloyds platform have also gained pace.

The Reinsurance segment of Everest Re has managed to outperform the broader market. Mt. Logan Re and Kilimanjaro Re Ltd. are key growth drivers and remain the fastest growing capital market vehicle. These are also an integral part of the company’s long-term capital management and business strategy.  

Wide product offerings and distribution capabilities along with industry-leading expense advantage and advanced capital and hedging abilities are anticipated to further enhance the growing global reinsurance franchise.

Everest Re has a strong capital management policy. It increases dividends each year and repurchases shares. Its dividend witnessed 5-year CAGR of 23.9% and yields 2.2%, better than the industry average of 0.4%. This makes the stock an attractive pick for yield-seeking investors.

Everest Re has an impressive VGM Score of A. This style score analyzes the growth prospects of a company.  This style score helps identify stocks with the most attractive value, best growth, and most promising momentum.

The Zacks Consensus Estimate for earnings indicates year-over-year improvement of 422.6% for 2019 and 2.3% for 2020. Steadily performing segments, huge market share, capital adequacy, financial flexibility and traditional risk management capabilities should poise the company well for long-term growth. Everest Re has a favorable Growth Score of A. This style score identifies growth prospects of a company. The expected long-term earnings growth is pegged at 10%.

Stocks to Consider    

Some better-ranked property and casualty insurance stocks are Alleghany Corporation Y, Hallmark Financial Services, Inc. HALL and RenaissanceRe Holdings Ltd. RNR. Each of these stocks sports a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here.

Alleghany provides property and casualty reinsurance and insurance products in the United States and internationally. The company delivered positive surprise of 35.21% in the last reported quarter.

Hallmark Financial underwrites, markets, distributes, and services property/casualty insurance products to businesses and individuals in the United States. The company delivered positive surprise of 55.00% in the last reported quarter.

RenaissanceRe provides reinsurance and insurance products in the United States and internationally. The company delivered positive surprise of 12.50% in the last reported quarter.

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