The following insurance stocks' dividend yields are thrashing that of the S&P 500 index, which stood at 1.99% on Friday.
The forward dividend yields of the following stocks are as of Friday, Feb. 1.
As an investor, I look favorably on insurance stocks. Last month, the Dow Jones Industrial Average (DJI) marked its strongest January in 30 years, but the Nasdaq Insurance (IXIS) performed even better. It exceeded the Dow Jones Industrial Average Index by over 182 basis points, rising 9.3%. Existing macroeconomic indicators on no-farm payrolls, the inflation rate and the U.S. Federal Reserve's interest rates prefigure that the stock market will continue to trend upwards, and insurance stocks move at a higher pace.
The superior forward dividend yield of the following stocks suggest that these securities are trading not more expensively than the average stock.
Blue Capital Reinsurance Holdings Ltd. (BCRH, Financial) closed at $7.06 on Friday. The share price fell 39% over the past year, pushing the forward dividend yield 1,286 basis points above the industry median to 17%. The stock has underperformed the S&P 500 index by about 41.2%. It has a market capitalization of roughly $62 million, a price-book ratio of 0.68 versus an industry median of 1.15 and a price-earnings ratio of 6.42 versus an industry median of 12.47. The price-sales ratio is 1.88 versus an industry median of 1.55.
The share price is below the 200-, 100-day simple moving average lines but above the 50-day SMA line. The 52-week range is $5.3 to $12.6.
Blue Capital Reinsurance Holdings is based in Bermuda and operates in the property catastrophe market, providing its U.S. and international clients with collateralized reinsurance solutions.
GuruFocus assigned the company a financial strength rating of 5 out of 10 and a profitability and growth rating of 2 out of 10.
For Wall Street, the share price is likely to underperform the market, but the price target of $9 still reflects a substantial premium on the share price at close Friday. The nearly 120% growth expected in next year’s earnings is the short-term catalyst.
Maiden Holdings Ltd. (MHLD, Financial) closed at $1.32 per share on Friday, after an 81% decline in the share price for the 52 weeks through Feb. 1. The market capitalization is $109.5 million. The drop pushed the forward dividend yield up to 15.15% compared to an industry median of 4.14%. The stock has a price-owner earnings ratio of 0.24 versus an industry median of 11.35.
The share price is below the 200-, 100- and 50-day simple moving average lines. The closing share price on Friday was 17.1% higher than the 52-week low of $1.11 and 600% lower than the 52-week high of $9.1.
Maiden Holdings Ltd. is a reinsurance company based in Bermuda. The company is active globally.
GuruFocus assigned the company a financial strength rating of 5 out of 10 and a profitability and growth rating of 3 out of 10.
The recommendation rating is to hold, and the average target price is $2.38 per share. Earnings are expected to jump by 98.2% in 2019 and 12% every year over the next five years.
The stock of Protective Insurance Corp. (PTVCB, Financial) closed at $18.53 on Friday. The market capitalization is about $274.3 million. The forward dividend yield is 6.04% compared to an industry median of 3.17%. The share price has decreased by 17% and fallen below the 200- and 100-day SMA lines but it is still above the 50-day simple moving average line, though only slightly. The price-book ratio is 0.69 versus an industry median of 1.43 and the price-sales ratio is 0.61 versus an industry median of 1.22. The 52-week range is $15.81 to $25.70 per share.
The Carmel, Indiana-based property and casualty insurance company is active in North American, Bermuda and Puerto Rico markets.
GuruFocus assigned a financial strength rating of 7 out of 10 and a profitability and growth rating of 4 out of 10.
The recommendation rating is to hold according to one analyst who is forecasting an 8% yearly upside in earnings for the next five years of business.
Disclosure: I have no positions in any securities mentioned.
