BDORY - BB Seguridade: Overestimated Risks And Very Attractive Valuation

2024-04-23 16:49:01 ET

Summary

• BB Seguridade has an excellent track record of results and dividend payments. The company has a resilient business model, and an excellent partnership with Banco do Brasil.
• The company operates in a sector that still has a lot to grow, and has the best indicators in the Brazilian sector, such as ROE exceeding 80%.
• Despite presenting the best indicators, the company trades at a P/E multiple with a 15% discount to its peers, due to overestimated risks in my view.

Investment Thesis

I recommend buying BB Seguridade Participacoes S.A. ( BBSEY ) shares. The insurance market in Brazil is growing, however, to achieve penetration into developed markets, there needs to be a stable economic environment with low inflation. In the macroeconomic scenario, Brazil has been making recent progress with an independent Central Bank and inflation control praised by several monetary authorities....

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