Everest Group, Ltd. (NYSE: EG)

Sector: Financial Services Industry: Insurance - Reinsurance CIK: 0001095073
Market Cap 14.18 Bn
P/B 0.92
P/E 25.69
P/S 0.80
ROIC (Qtr) 3.73
Div Yield % 1.73
Rev 1y % (Qtr) 0.79
Total Debt (Qtr) 3.59 Bn
Debt/Equity (Qtr) 0.23
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About

Investment thesis

Bull case

  • Strong operating cash flow of 4.25B provides robust 1.18x coverage of total debt 3.59B, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 62.24B provides 17.35x coverage of total debt 3.59B, indicating robust asset backing and low credit risk.
  • Operating cash flow of 4.25B provides exceptional 28.12x coverage of interest expenses 151M, showing strong debt service capability.
  • Operating cash flow of 4.25B provides strong 74.49x coverage of stock compensation 57M, indicating sustainable incentive practices.
  • Strong operating cash flow of 4.25B provides 3.86x coverage of SG&A expenses 1.10B, showing efficient operational cost management.

Bear case

  • Operating cash flow of 4.25B barely covers its investment activities of (3.69B), with a coverage ratio of -1.15, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 4.25B provides thin coverage of dividend payments of (338M) with a -12.56 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Retained earnings of 16.20B provide limited buffer against comprehensive income items of (154M), which is -105.21x, indicating elevated exposure to market risks.
  • Operating cash flow of 4.25B is outpaced by equity issuance of (442M) (-9.61 ratio), indicating concerning reliance on equity markets for funding operations.
  • R&D investment of 0 represents just 0x of SG&A expenses of 1.10B, indicating potential underinvestment in innovation relative to administrative overhead.

Breakdown of Revenue (2019)

Peer comparison

Companies in the Insurance - Reinsurance
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 RGA Reinsurance Group Of America Inc 16.26 Bn 28.93 1.93 5.73 Bn
2 RNR Renaissancere Holdings Ltd 14.46 Bn 5.46 1.13 2.33 Bn
3 EG Everest Group, Ltd. 14.18 Bn 25.69 0.80 3.59 Bn
4 HG Hamilton Insurance Group, Ltd. 3.15 Bn 7.19 1.15 0.15 Bn
5 SPNT SiriusPoint Ltd 2.31 Bn 12.64 0.81 0.68 Bn
6 GLRE Greenlight Capital Re, Ltd. 0.67 Bn -359.00 1.01 0.03 Bn
7 OXBR OXBRIDGE RE HOLDINGS Ltd 0.01 Bn -3.11 1.75 0.00 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.25 0.19
EV to Cash from Ops. EV/CFO 3.74 4.67
EV to Debt EV to Debt 4.42 6.23
EV to EBIT EV/EBIT 21.56 10.21
EV to EBITDA EV/EBITDA 21.47 9.47
EV to Free Cash Flow [EV/FCF] EV/FCF 3.74 4.67
EV to Market Cap EV to Market Cap 1.12 0.74
EV to Revenue EV/Rev 0.90 0.89
Price to Book Value [P/B] P/B 0.92 1.44
Price to Earnings [P/E] P/E 25.69 -40.31
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.63 5.81
Dividend Payout Ratio % Div Payout % (Qtr) 44.50 10.57
Dividend per Basic Share Div per Share (Qtr) 6.00 1.54
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 5.93 1.76
Interest Coverage Int. cover (Qtr) 4.87 9.07
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % 0.00 0.00
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -3.75 4.59
Dividend Growth (1y) % Div 1y % (Qtr) -20.00 -5.49
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -76.31 -15.00
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -72.23 -4.52
EBIT Growth (1y) % EBIT 1y % (Qtr) -72.33 -3.67
EBT Growth (1y) % EBT 1y % (Qtr) -76.72 -4.69
EPS Growth (1y) % EPS 1y % (Qtr) -78.98 -7.41
FCF Growth (1y) % FCF 1y % (Qtr) -18.25 -593.17
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -49.89 49.82
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.28 0.29
Cash Payout Ratio Cash Payout (Qtr) 0.08 0.02
Cash Ratio Cash Ratio 0.00 0.00
Current Ratio Current Ratio 0.00 0.00
Debt to Equity Ratio Debt/Equity (Qtr) 0.23 0.19
Interest Cover Ratio Int Coverage (Qtr) 4.87 9.07
Times Interest Earned Times Interest Earned (Qtr) 4.87 9.07
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 4.20 1.49
EBIT Margin % EBIT Margin % (Qtr) 4.16 1.33
EBT Margin % EBT Margin % (Qtr) 3.30 0.23
Gross Margin % Gross Margin % (Qtr) 10.40 38.56
Net Profit Margin % Net Margin % (Qtr) 3.10 -0.94