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Hannover Rück SE (FRA:HNR1): A Fundamentally Attractive Investment

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Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Hannover Rück SE (FRA:HNR1) due to its excellent fundamentals in more than one area. HNR1 is a financially-robust , dividend-paying company with a a great history of performance. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Hannover Rück here.

Excellent balance sheet with proven track record and pays a dividend

Over the past year, HNR1 has grown its earnings by 12%, with its most recent figure exceeding its annual average over the past five years. Not only did HNR1 outperformed its past performance, its growth also exceeded the Insurance industry expansion, which generated a 9.4% earnings growth. This is an optimistic signal for the future. HNR1's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. HNR1 seems to have put its debt to good use, generating operating cash levels of 0.9x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.

DB:HNR1 Income Statement, May 22nd 2019
DB:HNR1 Income Statement, May 22nd 2019

HNR1's high dividend payments make it one of the best dividend stocks on the market, and its profitability ensures that dividends are well-covered by its net income.

DB:HNR1 Historical Dividend Yield, May 22nd 2019
DB:HNR1 Historical Dividend Yield, May 22nd 2019

Next Steps:

For Hannover Rück, I've put together three pertinent factors you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for HNR1’s future growth? Take a look at our free research report of analyst consensus for HNR1’s outlook.

  2. Valuation: What is HNR1 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether HNR1 is currently mispriced by the market.

  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of HNR1? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.