On Mar 19, Zacks Investment Research upgraded AEGON
N.V. ( AEG
) to a Zacks Rank #1 (Strong Buy).AEGON N V (AEG): Free Stock Analysis ReportASSURED GUARNTY (AGO): Free Stock Analysis
ReportCIGNA CORP (CI): Free Stock Analysis ReportCNO FINL GRP (CNO): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment
Why the Upgrade?
AEGON has successfully recorded year-over-year earnings growth in
all the quarters of fiscal 2012.
On Feb 15, AEGON announced its fourth-quarter 2012 results.
Reported earnings of 29 cents per share were significantly above
the year-ago earnings of 1 cent per share. Effective cost
containment measures as well as improvement in business drove the
upside. Sales increased 29% year over year to $2.3 billion in the
AEGON intends to increase its dividend to 15 cents (to €0.11 per
share from €0.10 per share paid as the final dividend of 2011). The
board will propose the increase at the annual general meeting
scheduled on May 15, 2013.
Further, Vereniging Aegon, the company's largest stakeholder
agreed to cancel all preferred share holdings. If approved by
shareholders, this move will simplify AEGON 's capital
AEGON will end its life, health and pension joint venture with
Unnim Banc. Consequently, it will divest its 50% holding to Unnim
for $481.5 (EUR 353) million, resulting in an estimated book gain
of approximately $143 (EUR 105) million before tax. This
divestiture will also produce 12% annual return on
Nevertheless, AEGON sticks to its long-term commitment to Spain.
It partnered with Banco Santander to provide life and general
insurance products via its 4,600 bank branches. Through this
25-year partnership, AEGON can gain access to a prospective 12
million clientele. Moreover, Aegon will buy 51% stake in both a
life insurance company and non-life insurance company for $291.5
(EUR 220) million.
Further, in an effort to cement its foothold in the Central and
Eastern European region, AEGON will acquire the life insurance and
pension business of Eureko in Romania. Subsequent to the
acquisition, Aegon Romania, with about 650,000 pension fund
members, will emerge as the third largest pension provider, while
its life insurance portfolio will become one of the 10th largest in
the country. AEGON also purchased Fidem Life from Horizon Capital,
a private equity firm in Ukraine.
The Zacks Consensus Estimate for 2013 and 2014 currently stands at
93 cents and 97 cents per share, respectively. The long-term
expected earnings growth is 18.9%.
Other Stocks to Consider
Investors can also consider other multi-line insurers like
Assured Guaranty Ltd. ( AGO ), Cigna
Corp . ( CI
) and CNO Financial Group Inc . ( CNO ). While
Assured Guarantee carries a Zacks Rank #1 (Strong Buy), Cigna Corp.
and CNO Financial Group carry a Zacks Rank #2 (Buy).