Trading at a P/E ratio of 9.99, this insurance stock looks undervalued. Its shares have a current dividend yield of 3.10%, paid annually.
AXA SA (AXAHY)
From The Prudent Speculator
AXA is an insurance company that provides life and non-life insurance, savings and pension products, and asset management services to more than 100 million customers. Management expects a strong bounce back from a difficult 2020 that was marred by 1.7 billion euros of COVID-19 claims.
CEO Thomas Buberl said, “Many of the negative effects that we have seen in 2020 will not repeat. Therefore, we are very confident in our outlook. Also, given the very good business momentum that we can achieve, the 3% to 7% underlying earnings per share growth based on the normalized re-based underlying earnings of 6.3 billion euros.”
The firm has focused on improving its health insurance technology and broadly rerating customer policies given the tight market, particularly in Europe, driving premiums 20% higher over 2020.
We think steps to reduce earnings volatility and shifts toward shorter duration property & casualty lines will ultimately be rewarded by investors. AXAHY trades below book value, with a forward P/E ratio near 8.
John Buckingham, The Prudent Speculator, theprudentspeculator.com, 877-817-4394, March 3, 2021