Ageas Looks Undervalued On Its Core Earnings Power, With Capital Available To Support More Growth

As the insurance markets in Europe get back to normal after the various financial crises, not all of the participants have benefited equally. In my view, AXA (OTCQX:AXAHY) and Allianz (OTCQX:AZSEY) moved faster to reposition themselves for the new market realities, and I believe that's at least part of the reason why their shares have outperformed Belgium's Ageas (OTCPK:AGESY) over the past three years (as well as the past year). Nevertheless, I think Ageas has gone a long way toward stabilizing and repositioning its business, and I think the company is poised to benefit from better rates in life insurance and growing opportunities in Asia.

Ageas has surplus capital, and I expect that capital will go toward M&A or back to shareholders. I don't expect exceptional profit growth or return expansion from Ageas, but mid-single-digit growth is enough to support a fair value more than 10% above today's price, and I believe that the businesses will continue to support a healthy dividend payout to shareholders. Investors should note that the ADRs are not especially liquid, so buying the Belgium-listed shares (AGS.BR) may be a better option for some investors.

Click here for more:
Ageas Looks Undervalued On Its Core Earnings Power, With Capital Available To Support More Growth