Analyzing Third Point Reinsurance (TPRE) & Everest Re Group (RE)
Everest Re Group (NYSE: RE) and Third Point Reinsurance (NYSE:TPRE) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitabiliy and risk.
Earnings & Valuation
This table compares Everest Re Group and Third Point Reinsurance’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Everest Re Group||$6.04 billion||1.80||$1.10 billion||$26.88||9.85|
|Third Point Reinsurance||$861.79 million||1.69||$180.47 million||$1.72||8.05|
Everest Re Group has higher revenue and earnings than Third Point Reinsurance. Third Point Reinsurance is trading at a lower price-to-earnings ratio than Everest Re Group, indicating that it is currently the more affordable of the two stocks.
Everest Re Group pays an annual dividend of $5.00 per share and has a dividend yield of 1.9%. Third Point Reinsurance does not pay a dividend. Everest Re Group pays out 18.6% of its earnings in the form of a dividend. Third Point Reinsurance has increased its dividend for 4 consecutive years.
This is a breakdown of current recommendations for Everest Re Group and Third Point Reinsurance, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Everest Re Group||2||4||1||0||1.86|
|Third Point Reinsurance||0||2||1||0||2.33|
Everest Re Group presently has a consensus price target of $241.00, suggesting a potential downside of 9.01%. Third Point Reinsurance has a consensus price target of $15.00, suggesting a potential upside of 8.30%. Given Third Point Reinsurance’s stronger consensus rating and higher possible upside, analysts plainly believe Third Point Reinsurance is more favorable than Everest Re Group.
Risk and Volatility
Everest Re Group has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, Third Point Reinsurance has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.
Institutional and Insider Ownership
92.3% of Everest Re Group shares are owned by institutional investors. Comparatively, 68.7% of Third Point Reinsurance shares are owned by institutional investors. 1.3% of Everest Re Group shares are owned by company insiders. Comparatively, 36.9% of Third Point Reinsurance shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This table compares Everest Re Group and Third Point Reinsurance’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Everest Re Group||18.49%||12.70%||4.77%|
|Third Point Reinsurance||39.53%||28.63%||10.83%|
Third Point Reinsurance beats Everest Re Group on 9 of the 16 factors compared between the two stocks.
About Everest Re Group
Everest Re Group, Ltd., through its subsidiaries, is engaged in the underwriting of reinsurance and insurance in the United States, Bermuda and international markets. The Company operates in segments: U.S. Reinsurance, International, Bermuda and Insurance segment. The Company underwrites reinsurance both through brokers and directly with ceding companies. The Company underwrites insurance principally through general agent relationships, brokers and surplus lines brokers. The Company offers treaty and facultative reinsurance, and admitted and non-admitted insurance. Its products include the range of property and casualty reinsurance, and insurance coverage’s, including marine, aviation, surety, errors and omissions liability (E&O), directors’ and officers’ liability (D&O), medical malpractice, other specialty lines, accident and health (A&H) and workers’ compensation. Its subsidiaries include Everest Reinsurance (Bermuda), Ltd. (Bermuda Re) and Everest International Reinsurance, Ltd.
About Third Point Reinsurance
Third Point Reinsurance Ltd. is a holding company. Through the Company’s reinsurance subsidiaries, it provides property and casualty reinsurance coverage to insurance and reinsurance companies. The Company’s segments include Property and Casualty Reinsurance, and Corporate. The Company’s investable assets are managed by its investment manager, Third Point LLC. The Company also writes reinsurance contracts that provide protection against adverse development on loss reserves. Through Third Point LLC, the Company makes investments globally in all sectors, and in equity, credit, commodity, currency, options and other instruments. The Company also acts as the underwriter for the majority of the premium that it underwrites. The Company writes reinsurance contracts covering product lines, such as property, workers’ compensation, auto, general liability, professional liability, credit and financial lines, and multi-line.
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