Do Münchener Rückversicherungs-Gesellschaft's (ETR:MUV2) Earnings Warrant Your Attention?
Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.
In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like Münchener Rückversicherungs-Gesellschaft (ETR:MUV2). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.
Check out our latest analysis for Münchener Rückversicherungs-Gesellschaft
How Fast Is Münchener Rückversicherungs-Gesellschaft Growing Its Earnings Per Share?
Even with very modest growth rates, a company will usually do well if it improves earnings per share (EPS) year after year. So EPS growth can certainly encourage an investor to take note of a stock. It's good to see that Münchener Rückversicherungs-Gesellschaft's EPS have grown from €17.23 to €19.08 over twelve months. That's a 11% gain; respectable growth in the broader scheme of things.
I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). I note that Münchener Rückversicherungs-Gesellschaft's revenue from operations was lower than its revenue in the last twelve months, so that could distort my analysis of its margins. Münchener Rückversicherungs-Gesellschaft maintained stable EBIT margins over the last year, all while growing revenue 4.4% to €56b. That's a real positive.
You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. To that end, right now and today, you can check our visualization of consensus analyst forecasts for future Münchener Rückversicherungs-Gesellschaft EPS 100% free.
Are Münchener Rückversicherungs-Gesellschaft Insiders Aligned With All Shareholders?
Since Münchener Rückversicherungs-Gesellschaft has a market capitalization of €36b, we wouldn't expect insiders to hold a large percentage of shares. But we are reassured by the fact they have invested in the company. Indeed, they hold €12m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Even though that's only about 0.03% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.
Should You Add Münchener Rückversicherungs-Gesellschaft To Your Watchlist?
One positive for Münchener Rückversicherungs-Gesellschaft is that it is growing EPS. That's nice to see. If that's not enough on its own, there is also the rather notable levels of insider ownership. That combination appeals to me, for one. So yes, I do think the stock is worth keeping an eye on. Now, you could try to make up your mind on Münchener Rückversicherungs-Gesellschaft by focusing on just these factors, or you could also consider how its price-to-earnings ratio compares to other companies in its industry.
Although Münchener Rückversicherungs-Gesellschaft certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
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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.
