Building up an investment case requires looking at a stock holistically. Today I've chosen to put the spotlight on Reinsurance Group of America, Incorporated (NYSE:RGA) due to its excellent fundamentals in more than one area. RGA is a financially-robust company with a strong history superior dividend payments, trading at a great value. Below, I've touched on some key aspects you should know on a high level. For those interested in digging a bit deeper into my commentary, read the full report on Reinsurance Group of America here.
Established dividend payer and good value
With a debt-to-equity ratio of 38%, RGA’s debt level is acceptable. This indicates a good balance between taking advantage of low cost funding through debt financing, but having enough financial flexibility and headroom to grow debt in the future. RGA's has produced operating cash levels of 0.49x total debt over the past year, which implies that RGA's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. RGA's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. Investors have the opportunity to buy into the stock to reap capital gains, if RGA's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, RGA's share price is trading below the group's average. This further reaffirms that RGA is potentially undervalued.
Income investors would also be happy to know that RGA is a great dividend company, with a current yield standing at 1.9%. RGA has also been regularly increasing its dividend payments to shareholders over the past decade.
For Reinsurance Group of America, I've compiled three key factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for RGA’s future growth? Take a look at our free research report of analyst consensus for RGA’s outlook.
- Historical Performance: What has RGA's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of RGA? 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 firstname.lastname@example.org. 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.