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.
In the past year RGA had a positive cash flow from operations.
Each year in the past 5 years RGA has been profitable.
RGA had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of 0.62%, RGA is not doing good in the industry: 70.63% of the companies in the same industry are doing better.
RGA's Return On Equity of 6.95% is on the low side compared to the rest of the industry. RGA is outperformed by 65.03% 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
The Profit Margin of RGA (3.77%) is worse than 72.73% of its industry peers.
RGA's Profit Margin has declined in the last couple of years.
RGA has a worse Operating Margin (6.57%) than 62.94% 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.
Compared to 1 year ago, RGA has more shares outstanding
RGA has more shares outstanding than it did 5 years ago.
RGA has a better debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of RGA is 1.13, which is an excellent value as it means it would take RGA, only 1.13 years of fcf income to pay off all of its debts.
RGA has a Debt to FCF ratio (1.13) which is in line with its industry peers.
A Debt/Equity ratio of 0.50 indicates that RGA is somewhat dependend on debt financing.
The Debt to Equity ratio of RGA (0.50) is worse than 65.73% of its industry peers.
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
WACC7.62%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
RGA shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 7.43%.
Measured over the past years, RGA shows a quite strong growth in Earnings Per Share. The EPS has been growing by 11.09% on average per year.
Looking at the last year, RGA shows a small growth in Revenue. The Revenue has grown by 2.11% in the last year.
RGA shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.06% yearly.
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%-15.75%
3.2 Future
Based on estimates for the next years, RGA will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.38% on average per year.
The Revenue is expected to grow by 7.35% on average over the next years.
EPS Next Y1.93%
EPS Next 2Y6.48%
EPS Next 3Y7.59%
EPS Next 5Y8.38%
Revenue Next Year3.05%
Revenue Next 2Y6.06%
Revenue Next 3Y7.13%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 9.20, the valuation of RGA can be described as reasonable.
72.73% 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 (24.85), we can say RGA is valued rather cheaply.
RGA is valuated cheaply with a Price/Forward Earnings ratio of 7.99.
RGA's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. RGA is cheaper than 68.53% of the companies in the same industry.
RGA is valuated cheaply when we compare the Price/Forward Earnings ratio to 20.89, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.2 | ||
| Fwd PE | 7.99 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RGA is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, RGA is valued cheaper than 85.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.67 | ||
| EV/EBITDA | 9.95 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
PEG (NY)4.78
PEG (5Y)0.83
EPS Next 2Y6.48%
EPS Next 3Y7.59%
5. Dividend
5.1 Amount
RGA has a Yearly Dividend Yield of 1.76%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.19, RGA has a dividend in line with its industry peers.
Compared to the average S&P500 Dividend Yield of 2.40, RGA is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.76% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.13%
Div Incr Years15
Div Non Decr Years15
5.3 Sustainability
RGA pays out 29.26% of its income as dividend. This is a sustainable payout ratio.
RGA's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP29.26%
EPS Next 2Y6.48%
EPS Next 3Y7.59%
204.85
-1.56 (-0.76%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners99.27%
Inst Owner Change-1.07%
Ins Owners0.19%
Ins Owner Change5.32%
Market Cap13.54B
Analysts80
Price Target244.46 (19.34%)
Short Float %0.66%
Short Ratio0.95
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.76% |
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)-5.99%
Min Revenue beat(2)-6.99%
Max Revenue beat(2)-4.99%
Revenue beat(4)1
Avg Revenue beat(4)-1.55%
Min Revenue beat(4)-6.99%
Max Revenue beat(4)9.16%
Revenue beat(8)4
Avg Revenue beat(8)6.72%
Revenue beat(12)7
Avg Revenue beat(12)4.36%
Revenue beat(16)10
Avg Revenue beat(16)4.48%
PT rev (1m)-5.38%
PT rev (3m)-6.61%
EPS NQ rev (1m)-2.28%
EPS NQ rev (3m)-4.6%
EPS NY rev (1m)-0.25%
EPS NY rev (3m)-1.56%
Revenue NQ rev (1m)-2.37%
Revenue NQ rev (3m)1.57%
Revenue NY rev (1m)0.78%
Revenue NY rev (3m)5.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.2 | ||
| Fwd PE | 7.99 | ||
| P/S | 0.64 | ||
| P/FCF | 2.67 | ||
| P/OCF | 2.67 | ||
| P/B | 1.19 | ||
| P/tB | 1.19 | ||
| EV/EBITDA | 9.95 |
EPS(TTM)22.26
EY10.87%
EPS(NY)25.65
Fwd EY12.52%
FCF(TTM)76.61
FCFY37.4%
OCF(TTM)76.61
OCFY37.4%
SpS318.57
BVpS172.52
TBVpS172.52
PEG (NY)4.78
PEG (5Y)0.83
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
WACC7.62%
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 Y1.93%
EPS Next 2Y6.48%
EPS Next 3Y7.59%
EPS Next 5Y8.38%
Revenue 1Y (TTM)2.11%
Revenue growth 3Y10.36%
Revenue growth 5Y9.06%
Sales Q2Q%-15.75%
Revenue Next Year3.05%
Revenue Next 2Y6.06%
Revenue Next 3Y7.13%
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%