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 145 industry peers in the Insurance industry. Both the profitability and financial health of RGA have multiple concerns. RGA has a correct valuation and a medium 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.
RGA had a positive operating cash flow in each of the past 5 years.
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 65.52% of its industry peers.
With a Return On Equity value of 6.95%, RGA is not doing good in the industry: 68.28% of the companies in the same industry are doing better.
| 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 68.28% of its industry peers.
In the last couple of years the Profit Margin of RGA has declined.
RGA has a Operating Margin of 6.57%. This is in the lower half of the industry: RGA underperforms 66.90% 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.
The number of shares outstanding for RGA has been increased compared to 1 year ago.
RGA has more shares outstanding than it did 5 years ago.
RGA has a better debt/assets ratio than last year.
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 in the better half of the industry: RGA outperforms 61.38% 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 65.52% of the companies in the same industry.
Even though the debt/equity ratio score it not favorable for RGA, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.5 | ||
| Debt/FCF | 1.13 | ||
| Altman-Z | N/A |
ROIC/WACCN/A
WACC7.55%
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.
Looking at the last year, RGA shows a small growth in Revenue. The Revenue has grown by 2.11% in the last year.
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 8.90% on average over the next years. This is quite good.
The Revenue is expected to grow by 7.79% on average over the next years.
EPS Next Y2.94%
EPS Next 2Y6.8%
EPS Next 3Y7.17%
EPS Next 5Y8.9%
Revenue Next Year2.66%
Revenue Next 2Y6.43%
Revenue Next 3Y6.79%
Revenue Next 5Y7.79%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
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
With a Price/Earnings ratio of 8.74, the valuation of RGA can be described as very reasonable.
RGA's Price/Earnings ratio is a bit cheaper when compared to the industry. RGA is cheaper than 73.10% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.41. RGA is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 7.54, which indicates a rather cheap valuation of RGA.
Based on the Price/Forward Earnings ratio, RGA is valued a bit cheaper than the industry average as 70.34% of the companies are valued more expensively.
RGA is valuated cheaply when we compare the Price/Forward Earnings ratio to 35.19, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.74 | ||
| Fwd PE | 7.54 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as RGA.
Based on the Price/Free Cash Flow ratio, RGA is valued cheaper than 84.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2.54 | ||
| EV/EBITDA | 9.4 |
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)2.98
PEG (5Y)0.79
EPS Next 2Y6.8%
EPS Next 3Y7.17%
5. Dividend
5.1 Amount
RGA has a Yearly Dividend Yield of 1.81%. Purely for dividend investing, there may be better candidates out there.
RGA's Dividend Yield is comparable with the industry average which is at 3.76.
Compared to the average S&P500 Dividend Yield of 2.35, RGA is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.81% |
5.2 History
On average, the dividend of RGA grows each year by 6.13%, which is quite nice.
RGA has paid a dividend for at least 10 years, which is 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.
The dividend of RGA is growing, but earnings are growing more, so the dividend growth is sustainable.
DP29.26%
EPS Next 2Y6.8%
EPS Next 3Y7.17%
194.49
-2.16 (-1.1%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners99.88%
Inst Owner Change0%
Ins Owners0.24%
Ins Owner Change5.29%
Market Cap12.85B
Analysts77.33
Price Target246.2 (26.59%)
Short Float %0.74%
Short Ratio1.28
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.81% |
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)0%
PT rev (3m)-4.71%
EPS NQ rev (1m)-0.79%
EPS NQ rev (3m)-2.91%
EPS NY rev (1m)-0.33%
EPS NY rev (3m)0.74%
Revenue NQ rev (1m)0.29%
Revenue NQ rev (3m)-1.86%
Revenue NY rev (1m)0.99%
Revenue NY rev (3m)0.4%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.74 | ||
| Fwd PE | 7.54 | ||
| P/S | 0.61 | ||
| P/FCF | 2.54 | ||
| P/OCF | 2.54 | ||
| P/B | 1.13 | ||
| P/tB | 1.13 | ||
| EV/EBITDA | 9.4 |
EPS(TTM)22.26
EY11.45%
EPS(NY)25.8
Fwd EY13.27%
FCF(TTM)76.61
FCFY39.39%
OCF(TTM)76.61
OCFY39.39%
SpS318.57
BVpS172.52
TBVpS172.52
PEG (NY)2.98
PEG (5Y)0.79
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
WACC7.55%
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 Y2.94%
EPS Next 2Y6.8%
EPS Next 3Y7.17%
EPS Next 5Y8.9%
Revenue 1Y (TTM)2.11%
Revenue growth 3Y10.36%
Revenue growth 5Y9.06%
Sales Q2Q%-17%
Revenue Next Year2.66%
Revenue Next 2Y6.43%
Revenue Next 3Y6.79%
Revenue Next 5Y7.79%
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%