Is it the Right Time to Buy Reinsurance Group (RGA) Stock?
Shares of Reinsurance Group of America, Incorporated RGA gained 30.65% in the last one year, outperforming the Zacks categorized Life Insurance industry’s growth of 28.47%. The company also witnessed full-year 2017 estimates moving north by 0.6% in the past 60 days. We expect the stock to retain its momentum on the back of a number of positives.
Reinsurance Group boasts an industry-leading position in the U.S and Latin American traditional market. Continued product line expansion through market-leading services, capabilities, expertise and innovation will continue to help the company to maintain this position in the future. Moreover, product line expansion would facilitate risk diversification going forward.
Further, the Zacks Rank #2 (Buy) life insurer is likely to keep benefiting from a mix of organic and transactional opportunities.
This apart, Reinsurance Group has carved out a niche in the Canadian market and thus enjoys solid growth and profitability. The company anticipates longevity insurance – a source of diversified income – to experience steady demand and growth in the Canadian market.
Despite a challenging operating environment, the company has been witnessing sustained premium growth. This reflects the resilience of the company’s operating model and its ability to capitalize on opportunities and gain strong market positions.
Interestingly, Reinsurance Group has been displaying effective capital management through share buybacks and dividend payments. The new share buyback authorization of up to $400 million will help the company lower its share count and further boost the bottom line. On an average, the company expects to deploy $300–$400 million of excess capital, annually.
Currently, Reinsurance Group’s stock seems to be undervalued as it is trading at 1.14x price to book multiple over a period of one year. This compares favorably with the Life Insurance industry’s multiple of 1.96x.
Also, Reinsurance Group has a VGM Score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores. Also, the company’s long-term expected earnings growth is pegged at 9.00%.
Other Stocks to Consider
Investors interested in other stocks from the same space can consider Health Insurance Innovations, Inc. HIIQ, Fidelity & Guaranty Life FGL, Primerica, Inc. PRI.
Health Insurance Innovations operates as a developer, distributor, and administrator of cloud-based individual health and family insurance plans, and supplemental products in the U.S. The company delivered positive surprises in all of the last four quarters with an average beat of 270.84%. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fidelity & Guaranty Life offers annuities and life insurance products in the U.S. The company delivered positive surprises in two of the last four quarters with an average beat of 15.85%. The company carries a Zacks Rank #2 (Buy).
Primerica distributes financial products to middle-income households in the U.S. and Canada. The company delivered positive surprises all of the last four quarters with an average beat of 6.37%. The company holds a Zacks Rank #2.
Zacks' Top 10 Stocks for 2017
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2017? Who wouldn't? Last year's market-beating Top 10 portfolio produced 5 double-digit winners. For example, oil and natural gas giant Pioneer Natural Resources and First Republic Bank racked up stellar gains of +44.9% and +44.3% respectively. Now a brand-new list for 2017 has been hand-picked from 4,400 companies covered by the Zacks Rank. See the 2017 Top 10 right now>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Primerica, Inc. (PRI): Free Stock Analysis Report
Reinsurance Group of America, Incorporated (RGA): Free Stock Analysis Report
Health Insurance Innovations, Inc. (HIIQ): Free Stock Analysis Report
Fidelity and Guaranty Life (FGL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
