Opinions
The Panic-Proof Portfolio (Stockchase Research)
Everest Group, Ltd.
EG-N
TOP PICK
Apr 25, 2024
Stock price when the opinion was issued
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Premium contentEG is a Bermuda based reinsurance company who recently reported earnings of $678 million, 20% ROE and 23% growth in premiums written. January is a big month in renewals and the company believes they are well positioned. It trades at 7x earnings and 1.4x book. We recommend placing a stop-loss at $315, looking to achieve $447 -- upside potential of 22%. Yield 1.8%
(Analysts’ price target is $447.62)Premium contentPremium contentPremium contentRE's symbol has changed to EG, Everest Group. Market cap $14B, P/E 7.5X, yield 2.32%. An insurance company, it has shown decent historical growth, and consensus calls for very good growth this year and next. Recent premium growth in reinsurance was lower than expected, but not really to worrying proportions. Aviation losses are higher than average, but these should stabilize. The dividend has grown 6% over five years. We think EG is fine, if not exciting. It is priced well, and the stock is up 85% over ten years. We would be OK owning a small position as part of a US financial allocation.
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We reiterate this reinsurance company as a TOP PICK. Earnings will be released by month's end, so we will see if the company will be able to continue its EPS growth rates that it has seen over the past five years. It trades at 6x earnings, 1.2x book and supports a ROE of 23%. Its dividend is backed by a payout ratio under 15% of cash flow. We continue to recommend a stop at $344, looking to achieve $430 -- upside potential of 17%. Yield 1.8%
(Analysts’ price target is $430.83)