Markets

Everest Re (RE) Growth Prospects Bright: Should You Buy?

Dice with pencil on graph paper

Shares of Everest Re Group Ltd.RE gained momentum recently. Should you add the Zacks Rank #2 (Buy) property and casualty (P&C) insurer to your portfolio?

Factors to Consider

Shares of Everest Re gained 21.7%, outpacing the Zacks categorized Property and Casualty industry's growth of 15.7%, over the last six months. Robust gross written premium performance mainly contributed to the outperformance. Also, a robust liquidity position backed by strong cash flow generation helped the company to invest in strategic initiatives, which in turn, accelerated its growth.

Everest Re's Insurance segment has been witnessing improvement in gross written premiums in the past few years. The premium growth was driven by initiatives undertaken over the last couple of years, such as product diversification and expansion of the property insurance geographic footprint, to name a few.

Moreover, Mt. Logan Re, which is one of key growth drivers of the P&C insurer, has been experiencing significant improvement in its Asset Under Management (AUM) and remains the fastest growing capital market vehicle. The growth in AUM will help the company execute and enhance its long-term capital management and business strategy.

In addition, the company has been benefiting from its capital adequacy, financial flexibility, long-term operating performance and traditional risk management capabilities. Given its prudent capital management strategy and robust capital balance position, Everest Re is anticipated to make consistent dividend payouts and share buybacks.

In fact, valuation at the current level is attractive as the stock is trading at a forward P/E ratio of 11.8, a 59.5% discount to the industry average of 29.1. Further, Everest Re has a trailing 12-month return on equity (ROE) of 12.5%, which is higher than the industry average of 7%. Notably, Everest Re carries a VGM score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of these three scores.

Stocks to Consider

Investors interested in other stocks from the same space might consider Alleghany Corporation Y , NMI Holdings, Inc. NMIH and Arch Capital Group Ltd. ACGL . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Alleghany Corporation deals with P&C reinsurance and insurance businesses in the U.S. and internationally. The company delivered positive surprises in three of the last four quarters with an average beat of 20.52%.

NMI Holdings offers private mortgage guaranty insurance services in the U.S. The company delivered positive surprises in all of the last four quarters with an average beat of 62.80%.

Arch Capital offers property, casualty, and mortgage insurance and reinsurance products worldwide. It delivered positive surprises in all of the last four quarters with an average beat of 9.27%.

Zacks' Best Private Investment Ideas

In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time? Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

EVEREST RE LTD (RE): Free Stock Analysis Report

ALLEGHANY CORP (Y): Free Stock Analysis Report

ARCH CAP GP LTD (ACGL): Free Stock Analysis Report

NMI HOLDINGS-A (NMIH): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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


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

In This Story

NMIH ACGL RE Y

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More