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Update on RenaissanceRe's Share Buyback Program - Analyst Blog

Posted: 11/18/2013 3:00:00 PM
Referenced Stocks: CINF;MRH;NAVG;RNR

In an effort to boost shareholder value, the board of directors of RenaissanceRe Holdings Limited ( RNR ) approved an increase in the company's share buyback program. However, the news did not have much impact on the shares of the company as share price declined marginally by 0.25% to $94.20 on Nov 15, 2013.

With this increase, the company's total authorization currently stands at $500 million. This repurchase program has no expiry date.

The aforementioned program is an extension to the previous authorization under which RenaissanceRe was left with $489.2 million for repurchases. Previously in Aug 2013, RenaissanceRe had approved a renewal of its share repurchase program which brought the total authorization to $500 million. During the last reported quarter, the company purchased 0.22 million shares for $18.9 million.

RenaissanceRe's financial strength allows it to continue with its buyback program.  As of Sep 30, 2013, cash and cash equivalents stood at $266.4 million and cash from operations stood at $385.8 million.

RenaissanceRe delivered operating earnings per share of $3.36 in the third quarter of 2013, higher than the year-ago earnings of $2.07 per share. Share buybacks should boost the bottom line further. The Zacks Consensus Estimates for 2013 is currently $11.09, representing a 40.79% improvement from the year-ago period.

Additionally, the company declared a quarterly dividend of 28 cents per share payable on Dec 31, 2013 to shareholders of record as of Dec 13, 2013. RenaissanceRe has maintained a steady dividend payout, including $36.96 million paid in the first nine months of 2013.

The company continues to focus on improving revenues, expanding margins and fortifying its capital structure.

RenaissanceRe currently carries a Zacks Rank #3 (Hold). However, among others in the property and casualty insurance space that are worth considering, Cincinnati Financial Corp. ( CINF ), Montpelier Re Holdings Ltd. ( MRH ) and Navigators Group Inc. ( NAVG ) carry a favorable Zacks Rank #1 (Strong Buy).

CINCINNATI FINL (CINF): Free Stock Analysis Report

MONTPELIER RE (MRH): Free Stock Analysis Report

NAVIGATORS GRP (NAVG): Free Stock Analysis Report

RENAISSANCERE (RNR): Free Stock Analysis Report

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