RZC - Reinsurance Group: Baby Bonds Offer A Solid Return In Either Outcome
2025-02-19 19:06:00 ET
Summary
- Reinsurance Group of America Inc. has rebounded strongly post-pandemic, tripling its earnings.
- Despite a low P/E ratio of 8.5X, RGA is not as cheap as it appears.
- RGA's baby bonds though, met our buy criteria and we bought some.
Reinsurance Group of America Inc. (NYSE: RGA ) has been hitting it out of the park. The largest life reinsurance company had an extremely challenging time with the pandemic. Its earnings contracted over 50% from 2019 to 2020 and were down over 80% from its 2017 numbers. But through that trough came higher reinsurance rates and, well, higher interest rates. The first ensured profitability in its base business, and the latter enhanced the yield earned on its float. In the most recent quarter, RGA demonstrated just how powerful these tailwinds were....
Reinsurance Group: Baby Bonds Offer A Solid Return In Either Outcome