How does everyone feel about insurance stocks? Examples like MetLife, Prudential, Old Republic, Allstate etc. They always have PEs in the single digits and pay a decent yield. I know during the 2008 financial crisis some of them had drawdowns of close to 70%. However, their dividends continued to grow during that time.
(03-31-2022, 06:12 PM)jalanlong Wrote: [ -> ]How does everyone feel about insurance stocks? Examples like MetLife, Prudential, Old Republic, Allstate etc. They always have PEs in the single digits and pay a decent yield. I know during the 2008 financial crisis some of them had drawdowns of close to 70%. However, their dividends continued to grow during that time.
When I was putting my IRA together much to my surprise I bought FAF. Was the only property/casualty company I ended up owning. I have a few health insurance companies but those are a different beast.
Biggest issue for me is figuring out the balance sheets, particularly capital adequacy. Takes a lot of digging and even then I've not been as comfortable with that as I'd like to be. Sure, there's the BCAR but like a lot of rating systems, that just scratches the surface. Plus, while you can look for those for individual companies I haven't come across a free listing.
(03-31-2022, 06:12 PM)jalanlong Wrote: [ -> ]How does everyone feel about insurance stocks? Examples like MetLife, Prudential, Old Republic, Allstate etc. They always have PEs in the single digits and pay a decent yield. I know during the 2008 financial crisis some of them had drawdowns of close to 70%. However, their dividends continued to grow during that time.
I bought MET @ 42.50 before COVID and have been very happy with it. My YOC is over 5% currently.
MET and PRU are two I have owned. I purchased prior to Covid. I out smarted myself on PRU. I bought it very cheap and it ran up fast. They say you can't go broke taking a profit but it felt like it. I sold it after a big spike and it just kept grinding higher for a long time after the sale.
They belong in a dividend portfolio. Yes they can drawdown in a financial crisis but that is why we diversify. Something in our port will usually be struggling a bit at any given time and that is fine if they are solid companies.
Can't forget Aflac AFL either. Been a great long-time performer in the specialty insurance space.
I'll second AFL. It is one of those names with a perpetually suppressed P/E, so I've given up hoping that its spring will uncoil. But nonetheless it scores really well in my DG system. I haven't dug deeply into the others mentioned here.