Assured Guaranty Surges to 52-Week High - Analyst Blog

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On Mar 5, 2014, shares of Assured Guaranty Ltd . ( AGO ) touched a new 52-week high of $26.18. The momentum was driven by solid fourth-quarter and full-year 2013 earnings results. The one-year return from the stock came in at 38.6%, way ahead of the S&P's return of 23.4%.

The fourth-quarter earnings figure at Assured Guaranty clocked a positive surprise beat of 10.6% while the top line exceeded the Zacks Consensus Estimare by 16.3%. This takes forward the company's robust earnings performance wherein it delivered  positive earnings surprises in 3 of the last 4 quarters with an average beat of 22.4%. Year 2013 also marked the fourth consecutive year with an operating income that exceeded $0.5 billion at the company.

Assured Guaranty's total expenses fell by nearly 27.9% year over year primarily owing to lower loss expense that plunged 47.2% in the quarter, largely attributable to decline in U.S. residential mortgage-backed securities (RMBS) losses. However, higher U.S. public finance losses were a partial offset.

Assured Guaranty also strengthened its balance sheet. While cash balance improved 33% at year 2013-end, long-term borrowings edged down 0.4%.

With respect to returning value to shareholders, in 2013, the company spent $264 million to repurchase 12.5 million shares besides having $400 million remaining under its authorization. In addition, the board of directors increased its quarterly dividend by 10%, marking three straight years of dividend hike and bringing the total increase to 144% since its Nov 2011 dividend payment.

Assured Guaranty presently carries a Zacks Rank #3 (Hold). Some better-ranked multi-line insurers worth considering include AEGON N.V. ( AEG ), Old Republic International Corp. ( ORI ) and FBL Financial Group Inc . ( FFG ). While AEGON and Old Republic International sport a Zacks Rank #1 (Strong Buy), FBL Financial carries a Zacks Rank #2 (Buy).



AEGON N V (AEG): Free Stock Analysis Report

ASSURED GUARNTY (AGO): Free Stock Analysis Report

FBL FINL GRP-A (FFG): Free Stock Analysis Report

OLD REP INTL (ORI): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: RMBS , AEG , AGO , FFG , ORI

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