Rsa Insurance Group Ld Investors - RSA

Rsa Insurance Group Ld Investors - RSA

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Stock Name Stock Symbol Market Stock Type
Rsa Insurance Group Ld RSA London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
0.00 0.0% 684.20 01:00:00
Open Price Low Price High Price Close Price Previous Close
684.20 684.20
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loganair: Hargreaves Lansdown equity analyst William Ryder acknowledged the bid’s substantial premium to RSA’s prevailing share price, but pointed out that the premium to its ‘pre-CovidR17; high watermark above 580p in February was more marginal. ‘The offer seems more than reasonable to us, although investors will be hoping another bidder comes in to jack up the price,’ he said.
loganair: Forget gold and Bitcoin! I’d invest in this FTSE 100 stock to get rich and retire early RSA: Insurance business RSA (LSE: RSA) is another FTSE 100 share that could deliver impressive total returns in the long run. Its recent trading update showed that it is making progress in its aim to improve the customer experience. It has also delivered improved underwriting results, despite market conditions being competitive. The stock is forecast to post a rise in net profit of 8% in the next financial year. Since it trades on a price-to-earnings (P/E) ratio of 12.1, it seems to offer good value for money at the present time when compared to its wider sector. This suggests that it may deliver a rising share price over the coming years. Furthermore, RSA is expected to raise its dividends per share by around 11% in the next two financial years. This puts it on a forward dividend yield of 4.6% from a shareholder payout that is expected to be covered twice by net profit. Therefore, it could become increasingly attractive from an income investing standpoint, which may lead to greater investor demand for its shares. As such, now could be the right time to buy it as its growth and income investing prospects look set to improve.
loganair: Is FTSE 100 faller RSA Insurance a top buy after 9% plunge? Shares in RSA Insurance Group (LSE: RSA) fell by 9.9% in morning trading Friday, as the FTSE 100 insurance giant revealed a disappointing third quarter. Heavier-than-expected UK losses have led to an underwriting loss for the quarter, leading chief executive Stephen Hester to tell us that “actions to improve in the UK are well under way,” while the company reported a strong period in its international business. Problems in the UK stem partly from bad weather losses, but RSA’s motor and marine insurance sectors have been suffering too. But on the upside, UK household and commercial property insurance saw improvements. Although reported pre-tax profit should be ahead of last year, on an underlying basis it’s expected to come in below 2017’s result — and that was put down “primarily to elevated weather costs.” Buy or sell? What does all this say about RSA as an investment, and has it hit Mr Hester’s “best-in-class ambitions” for the company? Well, the first thought that strikes me is that insurance companies are in the business of shouldering risk for their clients, so when things go bad it’s the company that takes the hit and not the person with a wind-blown tree crushing their car, or whatever calamity it is. So investors should expect to see quarters like this, which are pretty much inevitable for any insurance company. And as an investor who likes the insurance business myself, I’d be looking to top up on share price drops like this. On the whole, I still see RSA as a solid long-term investment.
loganair: Barrie Cornes, equity research analyst at Panmure Gordon, noted that the profit warning was a “bit of a blow” and expected RSA’s shares to be “under pressure” today. He commented: “RSA is a well-run business and non-life insurers will of course be subject to large weather losses from time to time. “Although the share price has come off Summer highs where we viewed them as being priced for perfection, we still think that they are fully valued.” Equity Analyst Robert Stephen said "the prospects for the RSA share price in the near term could be uncertain. Investors have reacted negatively to today’s update, and this could cause further declines in the company’s valuation over the short run." "In the long term, I feel that the company has a sound strategy through which to generate improving financial performance. It has a P/E ratio of around 12 at the moment, and is forecast to post double-digit EPS growth in the next financial year." "As a result, it seems to offer good value for money to my mind, while a forward divided yield of 5.5% for next year means it could also have income investing appeal in the coming years."
standish11: RSA Insurance Group PLC Update ahead of investor meetings Intraday RSA Insurance Chart Intraday RSA Insurance Chart 25/09/2017 3:53pm UK Regulatory (RNS & others) TIDMRSA RNS Number : 7479R RSA Insurance Group PLC 25 September 2017 RSA Insurance Group plc 25 September 2017 Update ahead of investor meetings RSA will be meeting investors this week in connection with the Bank of America Merrill Lynch Annual Financials Conference. Trading results for the third quarter to date have been positive, consistent with prior trends, across the Company with the exception of the UK business segment. Here, catastrophe losses from the US, Caribbean and Mexico will impact September results in the marine and international portfolios. At present losses notified are well below reinsurance limits though the final position will take some weeks to emerge. Otherwise UK underlying results in the quarter continue to reflect the challenges visible in H1, against which underwriting actions are being taken. RSA will publish its Q3 Trading Update on November 2nd.
loganair: JP Morgan Cazenove today has raised its price target on RSA Insurance to 630p (from 585p) while Goldman Sachs raised its price target to 685p (from 665p). With the good progress made in the first three months of the year, together with confident management stated "key proof points for further progress coming through positively", Beaufort reiterates its Buy rating on the Shares. The shares are valued at FY2017E and FY2018E P/E multiples of 14.4x and 12.4x and dividend yields of 3.3% and 4.6%, respectively. The insurer also managed to reduce its interest bill by around £60m each year. Hester said this equated to giving investors a boost 6p per share. He added: "Last year we made 39p a share, so it’s quite material.”
loganair: By Robert Stephens - 2017 could be the year that dividend growth becomes the most important aspect of income investing. In 2016 and recent years, low levels of inflation have meant that investors focused on higher yielding stocks. While this was enough when inflation has been at or near zero, a faster rising price level could mean that the market favours fast growing dividends over high yields. For companies which are stifled by high payout ratios, lacklustre earnings growth and large interest repayments stemming from high debt levels, this could be a problem. Their dividend growth may be unable to keep pace with inflation and their share prices could suffer. However, for companies such as RSA Insurance (LON:RSA), a renewed focus by investors on dividend growth could be a fillip. It is due to raise dividends per share by over 40% in 2017. It should also benefit from continued improvements in its operating performance and a low valuation over the next year. 2017’s fastest growing dividend stock? Due to the potential for companies with fast-growing dividends to perform well in 2017, RSA Insurance has appeal. It only yields 2.6% today, but it is due to raise dividends by 40.3% in 2017. This could make it one of the fastest growing dividend stocks in the UK index, and it is being paid for out of a mix of a slightly higher payout ratio and improving operating performance. RSA is forecast to increase its payout ratio by 1% next year, which will put it at 48% versus 47% for 2016. Therefore, in spite of such a large planned increase in dividends, there is still the prospect of a higher payout ratio to boost payouts over the medium term. In fact, the company is targeting a payout ratio of up to 50% plus special dividends over the medium term. The bulk of the 40%+ forecast rise in dividends next year will be from improved financial performance as RSA gradually continues to benefit from a sound strategy. Operating improvements: In terms of RSA’s operational improvements, it has completed a large disposal programme. This has totalled around £1.2 billion, taken two years to complete and left a more appealing core business. The ‘new’ RSA has a superior risk/reward ratio than the ‘old’ RSA and should position the company for better performance in the long run. It has also cut costs and is on target to deliver £350 million in cost savings by 2018. This has taken place alongside a deleveraging process. For example, in the first half of the current year around £200 million of subordinated debt was retired. In spite of these improvements, RSA has a relatively low valuation. Its P/E ratio of 17.8 is due to drop to 13 next year. Given the company’s positive outlook, I feel this is fair. Further evidence of an appealing valuation is evidenced by its prospective yield for 2017 of 3.7%. Outlook: Given the risks facing the global economy, 2017 is a challenging year to forecast. However, higher inflation seems likely and this could cause income investors to pivot away from high yielding, slow dividend growth stocks and towards lower yields from stocks which have superior dividend growth potential. The risk of negative real income growth could spur this change. Since uncertainty from Brexit in particular is likely to rise, sterling could weaken and the pound could depreciate further. Therefore, inflation may overshoot The Bank of England’s current target. In such a climate, RSA has appeal. Its yield may be low today, but rapid growth in 2017 and the potential for further growth in 2018 mean that it could become more popular among income investors. Its operational improvements mean that its business is now lower risk and offers potentially higher rewards than in recent years, which bodes well for the long term. Trading at a fair price and with an upbeat outlook, the search for dividend growth leads to RSA in my view.
loganair: Insurer RSA (RSA) has cut costs to boost its bottom line, but investors need to see growth coming through soon. Following a 5% drop in premiums during the first nine months of the year, Hargreaves Lansdown analyst Nicholas Hyett commented: ‘The results show more of the same at RSA.. Premiums are broadly flat at constant currency, but progress on costs and underwriting suggest the bottom line continues to improve,’ said Hyett. ‘However, there’s a limit to how far costs can be cut. Eventually the group will need to start growing its gross written premiums, and in the highly competitive, price-driven world of commercial and personal insurance, that could well prove a challenge.’
loganair: Investor Doubts Remain About Zurich’s $8.8B Tentative Offer for UK’s RSA By Jeffrey Vögeli and Mark Bentley: Zurich Insurance announcement that it’s considering a 5.6 billion-pound ($8.8 billion) offer for RSA Insurance is leaving investors in doubt that the takeover will happen at that price. Chief Executive Officer Martin Senn, 58, is pressing on with the deal, which comes amid turmoil on financial markets. Acquisition targets globally are trading at an average of 15 percent below their offer prices, excluding negative spreads spurred by bidding wars, data compiled by Bloomberg show. A wide spread — usually greater than 5 percent — signals concern that an offer could get derailed or reduced. Insurance stocks have sunk about 8 percent since Zurich said it was considering an offer on July 28. “The deal hasn’t been done yet,” said Stefan Schuermann, an analyst at Vontobel AG in Zurich. “The market sees this possibility of a lower price in case Zurich finds skeletons in the closet.” ‘No Certainty’ RSA said Zurich had raised its bid on Tuesday, without saying what the previous offer was. Earlier in the month, it was offering about 525 pence while RSA was demanding at least 600 pence a share, the Sunday Telegraph reported Aug. 5. A deal would include Zurich honoring an interim dividend of 3.5 pence a share announced this month, RSA said. “Investors are conscious of the fact that Zurich has only made an indicative offer,” Guy de Blonay, manager of the Jupiter Global Financials SICAV fund, said in an e-mailed response to questions from London. “There is no certainty.” While Senn has said the purchase could bring significant cost-savings and other benefits, investors including Simon Wyss at Privatbank von Graffenried AG, have said he will need to persuade some shareholders. “I’m not that, sort of, convinced, to be honest,” Andrea Williams, a portfolio manager at Royal London Asset Management in London, who holds Zurich shares, said. “With Zurich in the past, I’ve got the impression that there was excess capital coming back to shareholders and that there wasn’t that much of an appetite for deals.”
loganair: Clearly, there has been discussion of the potential for takeovers within the insurance market in recent months, with a combination of low valuations and new rules regarding cash balances making diversification and mergers a more appealing prospect. And, in the last month, shares in RSA have gradually crept up from less than 400p to 450p prior to today’s announcement from Zurich. Of course, on the one hand a takeover for RSA would be good news for the company’s investors. It is likely to mean a substantial premium to the company’s share price prior to today’s announcement and, for investors looking for a quick gain, this would be a dream scenario. However, for longer term investors, the company’s new strategy holds considerable promise and it could be argued that there is significant potential for further capital gains in 2016 and beyond without RSA being taken over. In fact, RSA’s new management team, led by Stephen Hester, is doing a very good job of rationalising the business and shoring up its financial standing. As such, RSA is set to return to profitability in the current year and post earnings growth of 7% next year. This shows that the company is moving in the right direction and, with RSA trading on a price to book (P/B) ratio of just 1.16 even after today’s share price move, it appears to be very cheap at the present time. As a result, share price appreciation over the medium to long term appears to be very much on the cards without a bid. Furthermore, RSA looks set to become an excellent dividend stock once more, with its shareholder payouts having the potential to increase at a rapid rate over the medium term. For example, it may yield only 2.1% after today’s share price rise but, with dividends being covered almost three times by net profit, there is tremendous scope for their rise moving forward. And, when earnings growth is also factored in, RSA could return to its status as a great income play in the years ahead. Certainly, the fact that RSA is the subject of considerable takeover speculation shows that the company is turning its fortunes around after the accounting scandal and profit warnings that occurred in recent years. However, there could still be considerable value to be unlocked, which means that investors in the company seem to be in a win-win situation so that they stand to benefit whether a bid is made for the company, or not.
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