Home Most Popular Investing <!DOCTYPE html> <html> <head> <title>Why You Should Add RenaissanceRe (RNR) Stock to Your Portfolio</title> </head> <body> Unleash the Power of RenaissanceRe (RNR) Stock in Your Investment Arsenal!

Why You Should Add RenaissanceRe (RNR) Stock to Your Portfolio Unleash the Power of RenaissanceRe (RNR) Stock in Your Investment Arsenal!

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    Unleash the Power of RenaissanceRe (RNR) Stock in Your Investment Arsenal!

RenaissanceRe Holdings Ltd. RNR is riding a wave of success driven by surging premiums and investment income, robust segmental performances, strategic acquisitions, and a rock-solid financial standing. The upward trajectory of returns from the fixed maturity portfolio, coupled with improving underwriting results, further fuels its momentum. The favorable impact of a high interest rate environment remains a vital driver.

Price Performance & Zacks Rank

Over the past six months, shares of RenaissanceRe have outpaced the industry, rising by 6.1% compared to the industry’s 6.7% increase. Based in Pembroke, Bermuda, RNR offers insurance and reinsurance products domestically and internationally. Established in 1993, it currently boasts a market cap of $10.2 billion.

With its promising prospects, this Zacks Rank #2 (Buy) stock presents an enticing option for investment portfolios at present.

Let’s dive deeper.

The Zacks Consensus Estimate for RenaissanceRe’s current-year earnings stands at $34.04 per share, showing a notable year-over-year growth from the 2022 level of $7.30 per share. The management’s projection of a combined ratio in the mid-90s range for the Casualty and Specialty segment is expected to drive bottom-line growth in the forthcoming quarters. RNR has surpassed earnings expectations in the last four quarters, with an average surprise of 16.5%.

RenaissanceRe Holdings Ltd. Price and EPS Surprise

RenaissanceRe Holdings Ltd. Price and EPS Surprise

RenaissanceRe Holdings Ltd. price-eps-surprise | RenaissanceRe Holdings Ltd. Quote

The consensus estimate for RenaissanceRe’s current-year revenues is $8 billion, indicating a 15% year-over-year growth. The Casualty and Specialty division is expected to be a key driver of top-line expansion, with net premiums earned projected to surge by approximately 11.5% year over year in 2023.

Furthermore, the company is anticipated to reap the benefits of heightened returns from its fixed maturity and short-term portfolios, with net investment income expected to soar by a robust 116.8% year over year in 2023, fueled by the prevailing high-interest rate environment.

RenaissanceRe’s impressive trailing 12-month return on equity of 26.7% has exceeded the industry average of 7.2%, underscoring its capacity to generate substantial returns in comparison to industry benchmarks, reflecting its efficacy in capital investment.

The company’s noteworthy ability to generate escalating free cash flow is commendable, enhancing its financial maneuverability in the future. Over the trailing 12-month period, the metric surged by 33% year over year, and it concluded the third quarter with $1.2 billion in cash and cash equivalents.

RNR’s inorganic expansion endeavors continue to play a pivotal role in driving business growth. The recent acquisition of Validus Re from AIG stands out as a significant move in recent years. This strategic initiative is poised to not only augment the scale of its global property and casualty reinsurance business but also make a substantial contribution to overall profitability.

Nonetheless, the company’s escalating operational expenses continue to erode its margins, with a 30.4% year-over-year increase in 2022 and an anticipated 16.9% rise in 2023. Nevertheless, we remain optimistic that a systematic and strategic course of action will galvanize growth and bolster its financials over the long haul.

Other Key Picks

A few other top-rated stocks in the broader Finance sector are Assurant, Inc. AIZ, Brown & Brown, Inc. BRO, and The Hartford Financial Services Group, Inc. HIG. While Assurant currently flaunts a Zacks Rank #1 (Strong Buy), Brown & Brown and Hartford Financial Services currently carry a Zacks Rank #2. You can view the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Assurant’s current-year earnings points to a 31% year-over-year increase. It has surpassed earnings estimates in all of the past four quarters, with an average surprise of 42.4%. Additionally, the consensus estimate for AIZ’s 2023 revenues indicates 5.4% year-over-year growth.

The Zacks Consensus Estimate for Brown & Brown’s current-year earnings stands at $2.76 per share, implying a 21.1% year-over-year increase. It has witnessed five upward estimate revisions against none in the opposite direction during the past 60 days, and it has exceeded earnings estimates in each of the previous four quarters, with an average surprise of 12.3%.

The consensus estimate for Hartford Financial Services’ current-year earnings suggests a 7.7% year-over-year increase, having surpassed earnings estimates in three of the past four quarters and meeting once, with an average surprise of 10.8%. Furthermore, the consensus estimate for HIG’s 2023 revenues signals an 8.5% year-over-year expansion.

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The Hartford Financial Services Group, Inc. (HIG) : Free Stock Analysis Report

Assurant, Inc. (AIZ) : Free Stock Analysis Report

RenaissanceRe Holdings Ltd. (RNR) : Free Stock Analysis Report

Brown & Brown, Inc. (BRO) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.