REINSURANCE GROUP OF AMERICA (RGA) Stock Fundamental Analysis
NYSE:RGA - New York Stock Exchange, Inc. - US7593516047 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to RGA. RGA was compared to 143 industry peers in the Insurance industry. RGA may be in some trouble as it scores bad on both profitability and health. RGA is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year RGA was profitable.
RGA had a positive operating cash flow in the past year.
RGA had positive earnings in each of the past 5 years.
In the past 5 years RGA always reported a positive cash flow from operatings.
1.2 Ratios
RGA's Return On Assets of 0.62% is on the low side compared to the rest of the industry. RGA is outperformed by 69.23% of its industry peers.
RGA has a worse Return On Equity (6.95%) than 69.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.62% | ||
| ROE | 6.95% | ||
| ROIC | N/A |
ROA(3y)0.71%
ROA(5y)0.78%
ROE(3y)7.95%
ROE(5y)7.15%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 3.77%, RGA is doing worse than 72.73% of the companies in the same industry.
In the last couple of years the Profit Margin of RGA has declined.
RGA has a worse Operating Margin (6.57%) than 65.73% of its industry peers.
RGA's Operating Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.57% | ||
| PM (TTM) | 3.77% | ||
| GM | N/A |
OM growth 3Y-10.39%
OM growth 5Y-9.28%
PM growth 3Y-23.03%
PM growth 5Y-11.78%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
RGA does not have a ROIC to compare to the WACC, probably because it is not profitable.
RGA has more shares outstanding than it did 1 year ago.
RGA has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, RGA has an improved debt to assets ratio.
2.2 Solvency
RGA has a debt to FCF ratio of 1.13. This is a very positive value and a sign of high solvency as it would only need 1.13 years to pay back of all of its debts.
RGA has a Debt to FCF ratio of 1.13. This is comparable to the rest of the industry: RGA outperforms 58.74% of its industry peers.
A Debt/Equity ratio of 0.50 indicates that RGA is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.50, RGA is doing worse than 65.73% of the companies in the same industry.
Although RGA does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | 1.13 | ||
| Altman-Z | N/A |
ROIC/WACCN/A
WACC7.64%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.43% over the past year.
RGA shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 11.09% yearly.
RGA shows a small growth in Revenue. In the last year, the Revenue has grown by 2.11%.
The Revenue has been growing by 9.06% on average over the past years. This is quite good.
EPS 1Y (TTM)7.43%
EPS 3Y174.8%
EPS 5Y11.09%
EPS Q2Q%-5.98%
Revenue 1Y (TTM)2.11%
Revenue growth 3Y10.36%
Revenue growth 5Y9.06%
Sales Q2Q%-17%
3.2 Future
The Earnings Per Share is expected to grow by 8.38% on average over the next years. This is quite good.
RGA is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 7.35% yearly.
EPS Next Y3.27%
EPS Next 2Y6.59%
EPS Next 3Y7.92%
EPS Next 5Y8.38%
Revenue Next Year1.81%
Revenue Next 2Y5.53%
Revenue Next 3Y7.85%
Revenue Next 5Y7.35%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 8.97, the valuation of RGA can be described as very reasonable.
72.03% of the companies in the same industry are more expensive than RGA, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of RGA to the average of the S&P500 Index (25.82), we can say RGA is valued rather cheaply.
With a Price/Forward Earnings ratio of 7.77, the valuation of RGA can be described as very cheap.
68.53% of the companies in the same industry are more expensive than RGA, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, RGA is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.97 | ||
| Fwd PE | 7.77 |
4.2 Price Multiples
RGA's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of RGA indicates a rather cheap valuation: RGA is cheaper than 84.62% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.61 | ||
| EV/EBITDA | 9.79 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates RGA does not grow enough to justify the current Price/Earnings ratio.
PEG (NY)2.74
PEG (5Y)0.81
EPS Next 2Y6.59%
EPS Next 3Y7.92%
5. Dividend
5.1 Amount
RGA has a Yearly Dividend Yield of 1.75%.
RGA's Dividend Yield is comparable with the industry average which is at 3.18.
Compared to the average S&P500 Dividend Yield of 2.36, RGA is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.75% |
5.2 History
The dividend of RGA is nicely growing with an annual growth rate of 6.13%!
RGA has been paying a dividend for at least 10 years, so it has a reliable track record.
RGA has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.13%
Div Incr Years15
Div Non Decr Years15
5.3 Sustainability
29.26% of the earnings are spent on dividend by RGA. This is a low number and sustainable payout ratio.
The dividend of RGA is growing, but earnings are growing more, so the dividend growth is sustainable.
DP29.26%
EPS Next 2Y6.59%
EPS Next 3Y7.92%
199.61
-3.28 (-1.62%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners99.27%
Inst Owner Change1.72%
Ins Owners0.19%
Ins Owner Change5.32%
Market Cap13.19B
Analysts80
Price Target244.46 (22.47%)
Short Float %0.66%
Short Ratio0.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.75% |
Yearly Dividend3.48
Dividend Growth(5Y)6.13%
DP29.26%
Div Incr Years15
Div Non Decr Years15
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.34%
Min EPS beat(2)-6.11%
Max EPS beat(2)5.42%
EPS beat(4)3
Avg EPS beat(4)5.09%
Min EPS beat(4)-6.11%
Max EPS beat(4)14.34%
EPS beat(8)7
Avg EPS beat(8)11.29%
EPS beat(12)10
Avg EPS beat(12)24.97%
EPS beat(16)12
Avg EPS beat(16)17.52%
Revenue beat(2)0
Avg Revenue beat(2)-6.67%
Min Revenue beat(2)-8.36%
Max Revenue beat(2)-4.99%
Revenue beat(4)1
Avg Revenue beat(4)-1.89%
Min Revenue beat(4)-8.36%
Max Revenue beat(4)9.16%
Revenue beat(8)4
Avg Revenue beat(8)6.55%
Revenue beat(12)7
Avg Revenue beat(12)4.25%
Revenue beat(16)10
Avg Revenue beat(16)4.4%
PT rev (1m)-5.38%
PT rev (3m)-6.61%
EPS NQ rev (1m)-1.75%
EPS NQ rev (3m)-2.8%
EPS NY rev (1m)1.32%
EPS NY rev (3m)0.99%
Revenue NQ rev (1m)-2.22%
Revenue NQ rev (3m)1.89%
Revenue NY rev (1m)-0.43%
Revenue NY rev (3m)4.53%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.97 | ||
| Fwd PE | 7.77 | ||
| P/S | 0.63 | ||
| P/FCF | 2.61 | ||
| P/OCF | 2.61 | ||
| P/B | 1.16 | ||
| P/tB | 1.16 | ||
| EV/EBITDA | 9.79 |
EPS(TTM)22.26
EY11.15%
EPS(NY)25.7
Fwd EY12.87%
FCF(TTM)76.61
FCFY38.38%
OCF(TTM)76.61
OCFY38.38%
SpS318.57
BVpS172.52
TBVpS172.52
PEG (NY)2.74
PEG (5Y)0.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.62% | ||
| ROE | 6.95% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | 6.57% | ||
| PM (TTM) | 3.77% | ||
| GM | N/A | ||
| FCFM | 24.05% |
ROA(3y)0.71%
ROA(5y)0.78%
ROE(3y)7.95%
ROE(5y)7.15%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y-10.39%
OM growth 5Y-9.28%
PM growth 3Y-23.03%
PM growth 5Y-11.78%
GM growth 3YN/A
GM growth 5YN/A
F-Score4
Asset Turnover0.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | 1.13 | ||
| Debt/EBITDA | 4.01 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 6.15 | ||
| Cash Conversion | 354.3% | ||
| Profit Quality | 638.46% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score4
WACC7.64%
ROIC/WACCN/A
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)N/A
Cap/Sales(5y)N/A
Profit Quality(3y)670.03%
Profit Quality(5y)631.93%
High Growth Momentum
Growth
EPS 1Y (TTM)7.43%
EPS 3Y174.8%
EPS 5Y11.09%
EPS Q2Q%-5.98%
EPS Next Y3.27%
EPS Next 2Y6.59%
EPS Next 3Y7.92%
EPS Next 5Y8.38%
Revenue 1Y (TTM)2.11%
Revenue growth 3Y10.36%
Revenue growth 5Y9.06%
Sales Q2Q%-17%
Revenue Next Year1.81%
Revenue Next 2Y5.53%
Revenue Next 3Y7.85%
Revenue Next 5Y7.35%
EBIT growth 1Y2.6%
EBIT growth 3Y-1.11%
EBIT growth 5Y-1.06%
EBIT Next Year-6.91%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y85.46%
FCF growth 3Y31.05%
FCF growth 5Y32.75%
OCF growth 1Y83.84%
OCF growth 3Y30.85%
OCF growth 5Y32.35%