Fundamental analysis
Reinsurance Group of America, or RGA for short, is a leading U.S. reinsurance company specializing in life insurance. The reinsurer is an insurance company for insurance companies. It is headquartered in St. Louis, Missouri, USA. The company was founded in 1973.
The company’s assets amount to 97.6 billion U.S. dollars and the value of life reinsurance is 3,700 billion U.S. dollars. RGA is the only international reinsurance company that focuses only on life insurance.
The company has more than 4,000 employees.
RGA has been paying a dividend to investors for 15 consecutive years.
The reinsurance business is a stable, long-term business that is not subject to as many cyclical fluctuations. Therefore, the company has thrived even in times of covide. Since 2021, the company has raised its turnover from $16,667 million to $21,375 million.
Net profit last year was USD 858 million. This is a slight decline from 2022, when profits were US$902 million.
Over the past year, the share price has risen 43%.
The company invests assets in low-risk bonds, mortgages and other stable financial products.
Results
For Q2 2024, the company posted an ROE of 9.07%.
Earnings available to RGA shareholders reached $203 million($3.03 per share), comparable to earnings in the same quarter a year ago: $205 and $3.05 per share.
The RSI reacted with a sharp climb, but is now back in the neutral zone.
The stock reacts a lot to supports and resistances, which is historically seen at the $150 resistance. It took several months to overcome it.
Technical analysis
The current PE is 9.19.
The company has been growing since October 2023. The moving average spread widened slowly until August 2024, when a sharp one-day decline in the stock caused the spread to narrow. However, the price has bounced off support at $196 per share and is on the rise again.
Average volume is above 100,000 shares per day.
Conclusion
A stable company whose revenues are from both business and mammoth asset management. Interest is generated from these. Investor interest is evidenced by a share price increase of over 40%, solidly outperforming the S&P 500 (+18% over the same period).
On the other hand, unpredictable stock declines do not avoid counter-cyclical titles like RGA, as demonstrated by August 2024. This should be kept in mind when making any investment.