Italian insurance company Assicurazioni Generali S.p.A. (MIL:G, Financial) issued financial results for 2018 on March 14.
The company, which is the largest insurer in Italy, recorded strong growth in operating and net income, causing it to increase the dividend. Based on a 9.4% year-over-year increase in net income to 2.3 billion euros ($2.6 billion) and on a 3% growth in operating income to 4.9 billion euros, the board proposed a 5.9% hike in the annual dividend to 0.90 euros per common share.
The proposed dividend leads to a juicy forward dividend yield of 5.6% compared to the industry median of 4% as of March 14. The insurance company has paid dividends since 2002.
Due to impairment charges and lower net realized gains on equity investments, the non-operating loss was 1.36 billion euros, compared to a loss of 1.11 billion euros in 2017.
Shares were up 0.41% at 16.07 euros on the Borsa Italiana in early trading on Friday for a market capitalization of roughly 25.13 billion euros. The stock has climbed nearly 6% over the 52 weeks through March 14.
The share price is substantially above the 200, 100 and 50-day simple moving average lines. The 52-week range is 13.62 euros to 17.13 euros.
Assicurazioni Generali provides its clients with several insurance solutions. It is structured in three segments: life, property and casualty and holding and other businesses.
In 2018, total premiums were shared between the life segment for 46.08 billion euros, a 5.7% increase from 2017, and the property and casualty business for 20.61 billion euros, a 3.3% increase year over year.
The deployment of capital into real assets helped the company reach a 24% improvement in the net result of asset management to 235 million euros.
Though it posted a loss of 70 million euros, the holding and other businesses segment slightly improved from a loss of 163 million euros last year.
Total income revenue declined 10.5% to 74.7 billion euros.
In a statement, CEO Philippe Donnet commented on the company's performance.Ă‚
“With the results presented today, Assicurazioni Generali has completed the 2015-18 strategic plan exceeding all the targets and successfully concluding its industrial turnaround," he said. "This was accomplished even considering the difficult macro scenario, confirming our ability to execute and create sustainable value for all stakeholders.”
Between 2015 and 2018, the company reached cumulative net operating cash of 8 billion euros, exceeding the target of 7 billion euros, and cumulative dividends of 5.1 billion euros, topping the target of 5 billion euros.
Assicurazioni Generali also reached an average rate for operating return on equity of 13.4%, versus the target of 13%.
Disclosure: I have no positions in any securities mentioned.
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