We have reiterated our Neutral recommendation on
RenaissanceRe Holdings Ltd.
) as the positive impacts of strategic divestitures, efficient
capital deployment andstable ratings are partially offset by the
headwinds. This property and casualty insurer carries a Zacks
Rank #3 (Hold).
RenaissanceRe did not witness any earnings momentum in the
last 30 days. As a result, the Zacks Consensus Estimate for the
company's 2013 earnings per share remained constant at $10.11.
This represents a year-over-year increase of 28.29%.
Even the Zacks Consensus Estimate for RenaissanceRe's
second-quarter earnings remained unchanged at $2.48, up 15.79%
over the year-ago quarter. The company generated positive
earnings surprise in 2 out of the past 4 quarters, with an
average beat of 18.48%.
Further, RenaissanceRe has witnessed a positive trend in gross
premiums over 2011 and 2012. Although gross premiums witnessed a
decline in the first quarter of 2013, improving macroeconomic
conditions and premium growth in the Lloyd's segment are expected
to maintain the positive growth trend in the future.
Moreover, the company has been deploying its excess capital to
enhance shareholder wealth over the past several quarters.
In Feb 2013, RenaissanceRe announced a 3.7% hike in its
quarterly dividend, marking the 18
consecutive annual dividend increase. In the same month, the
company increased its share buyback program to $500 million from
$286 million as of Dec 31, 2012, so as to share more profits with
The financial strength of RenaissanceRe is reinforced by its
strong debt and credit ratings. In Jun 2013, A. M. Best affirmed
the issuer credit rating of the company at "a-". All debt ratings
of the company were also affirmed with a stable outlook.
However, these positives were partly offset by negatives such
asvolatile investment income, high competition and
weather-related risks in the catastrophe insurance and
Other Stocks to Consider
Other property and casualty insurers, which look attractive at
the moment, are
American Safety Insurance Holdings Ltd.
Hilltop Holdings Inc.
). All these companies carry a Zacks Rank #1 (Strong Buy).
AMER SAFETY INS (ASI): Free Stock Analysis
HILLTOP HLDGS (HTH): Free Stock Analysis
RENAISSANCERE (RNR): Free Stock Analysis
ALLEGHANY CORP (Y): Free Stock Analysis
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