On Mar 18, 2014, shares of
RenaissanceRe Holdings Ltd.
) touched a 52-week high of $98.00. The positive momentum was
driven by a recent dividend hike, increased share buyback
authorization and strong performance delivered by the company for
the fourth quarter and full-year 2013. The shares gained about
8.6% since it reported its results on Feb 4.
In the fourth quarter, RenaissanceRe reported operating earnings
per share of $4.64, ahead of the Zacks Consensus Estimate by
about 63%. Results fared better than expected on the back of
premium growth in the Specialty Reinsurance and Lloyd segments
coupled with lower catastrophes.
RenaissanceRe revealed healthy top-line growth with revenues
escalating 19% year over year and surpassed the Zacks Consensus
Estimate by 12.2%. The improvement was mainly driven by increased
investment income and gains on investment.
In 2014, the company expects to witness growth in the Lloyds
business as it continues to expand its franchise into profitable,
diversifying classes of business.
Given increasing competition, RenaissanceRe is focusing on adding
value to its current set of customers by introducing new
Moreover, the company has made attempts to reduce uncertainties
associated with the weather and weather-related energy risk
management operations of REAL by divesting
RenRe Energy Advisors Ltd.
) in Oct 2013.
The global expansion of RenaissanceRe's reinsurance business with
the introduction of its U.S. platform - RenaissanceRe
Underwriting Managers U.S. LLC - in Connecticut is also expected
to generate long-term growth at the company. The expected
long term earnings growth for the stock comes at 9.5%
With respects to returning value to shareholders, the company
declared a 3.6% increase in its quarterly dividend to 29 cents
per share in Feb 2014, making it nineteenth consecutive dividend
increase. The company also increased its current share
repurchase authorization to $500 million.
RenaissanceRe, carrying a Zacks Rank #3 (Hold), boasts of solid
asset quality and overall sound capital position, liquidity and
financial flexibility, which compels credit rating agencies to
give it a strong credit score. .
Some better ranked stocks like
Atlas Financial Holdings, Inc.
), both sporting a Zacks Rank #1 (Strong Buy), are worth
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