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Swiss RE - a colossus, market leader and the oldest house among global reinsurers - has been on the market for over 150 years. According to its own information, Swissre's business is divided into the areas of insurance, reinsurance, assurance and other forms of insurance-based risk transfer. Swiss Re shares are listed on the Swiss SIM index.
How has the Swiss Re share performed in recent years? What are the prospects for the Swiss Re share and, above all, how can it serve you as an investor (keyword: Swiss Re dividend or share price growth)?
If you have any more questions on the topic, we look forward to an exchange in the comments!
In 2020, Swissre posted revenues of $42.8 billion with EBIT of -$1.07 billion and a loss of $878 million. Various natural disasters and, of course, the global Corona pandemic have put Swissre in the red. The year before, the company made a profit of USD 727 million. Analysts' expectations for 2021 do not look particularly rosy either, with a substantial loss expected due to various factors (including the unpredictable risks of the Corona pandemic).
But what does that do to Swiss Re share and what does this mean for your potential investment? Swiss Re shares have performed quite positively in recent years, at least until the beginning of February 2020. Standing at around USD 14.50 in 2009, Swiss Re shares had worked their way up to just under USD 110 - but were then buffeted in the wake of the global pandemic, just like many other insurance companies.
If we now look at some common data from classical fundamental analysis, a first impression of the Swiss Re share is rounded off. The P/E ratio (price/earnings ratio), which is composed of the share price/earnings per share, was negative for the Swiss Re share in 2020, whereas this ratio is positive again in 2021 at 10.47 and thus currently represents a relatively cheaply valued share. Shortly before the pandemic, the KGV by the way at about 44, so the stock was significantly more expensive.
Stock market professionals and amateur investors alike know, of course, that simply looking at the P/E ratio should not be a case-closing view of Swiss Re stock. For example, the P/E ratio doesn't look at potential earnings growth, which is not insignificant if Swissre posts a loss in 2019. We therefore take an additional look at the KUV (price-to-sales ratio), which only indirectly takes into account the special situation of the pandemic and thus serves as an additional valuation indicator. In the case of the Swiss Re share, this is 0.54. This means that Swiss Re is worth 0.54 times as much on the stock exchange as it generates in sales in a year, which also indicates that the share is cheap. Historically, by the way, this value has always been below one in the last 20 years.
As an investor in a public company, you always have different ways of generating returns. The obvious one is through price gains, but in the case of Swiss Re shares in particular, the dividend is a key factor in deciding whether to buy.
Swissre has been and continues to be a dividend pearl (you can find out what dividend pearls are in the following article) and as long as this remains the case, quite attractive for an investment. Over the last 5 years, Swissre has paid dividends ranging from $4.9 in 2016 to $5.9 in 2020. By the way, the dividend has been paid for over 21 years. That's quite something and makes Swiss Re shares very attractive, especially for investors who rely on a dividend strategy in their portfolio or parts of their portfolio.
Analysts expect Swiss Re to continue to pay a handsome dividend in the coming years, but this cannot be predicted. The possible burdens from the Corona pandemic are too uncertain. No one can predict what impact the global climate situation will have on the insurance industry in the coming years. Swiss Re shares are very favourably valued by industry standards, pay the highest yield, but lag behind their peers in terms of share price performance. If the burdens from the Corona pandemic do not turn out to be too high, Swiss Re shares will continue to be an interesting option for your dividend strategy over the next few years.
What are you still missing on the topic? Do you already hold the stock in your portfolio or will you soon?
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