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Reinsurance Group Hits 52-Week High on Solid Q4 Earnings - Analyst Blog

On Feb 17, Reinsurance Group of America Inc. ( RGA ) touched a 52-week high of $90.26. The rise in the stock was propelled by strong fourth-quarter earnings which outpaced the Zacks Consensus Estimate by 41.7%. About 316,012 shares exchanged hands in the last session.

Growth Drivers

Reinsurance Group's strong fourth-quarter financial performance was a continuation of superior results and attractive revenue and earnings growth. Investors are optimistic on the stock given that Reinsurance Group delivered a positive surprise in six out of the past eight quarters. The average earnings beat for the last four quarters is 14.4%.

In the just-reported quarter, the company's operating income of $2.99 per share, surpassed the Zacks Consensus Estimate of $2.11 by 41.7% and improved 37.8% year over year.

The quarterly results were driven by strong international earnings from Europe, the Middle East and Africa (EMEA) and the Asia Pacific, along with continued momentum in Global Financial Solutions.

Along with the bottom line, Reinsurance Group's top-line growth of 1.4% year over year to $2.69 billion also impressed investors.

Book value per share, which is a measure of company's net worth, grew 21.8% year over year to $102.13.

Investors' confidence in the stock also stems from the company's earnings outlook. For 2015, the company expects 5-8% growth in operating income per share along with 11-12% operating return on equity. Moreover, the company is expected to deploy $250-$400 million of excess capital annually.

Also, Reinsurance Group's intelligent capital management, which enables regular share, repurchases and dividend increases, makes the stock a favorite among investors.

Reinsurance Group carries a Zacks Rank #3 (Hold).

Stocks to Consider

Better-ranked players in the industry include Allied World Assurance Company Holdings, AG ( AWH ), Endurance Specialty Holdings Ltd. ( ENH ) and HCI Group, Inc. ( HCI ). While Allied World and Endurance Specialty carry a Zacks Rank # 1 (Strong Buy), HCI Group carries a Zacks Rank # 2 (Buy).

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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 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.

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