This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Everest Offers Rock to Investors: Is It Safe?

"Is It Safe?" looks at a company's risk-and-reward potential. Find out if your stocks are safe on Tuesdays and Thursdays.

HAMILTON, Bermuda ( TheStreet) -- In the past year, some stocks have served as rocks for investors, sources of stability in turbulent markets. Everest Re Group (RE - Get Report) is one of them.

There has much discussion of the possibility of a market correction following the 50% rise of the S&P 500 Index since March. The Bermuda-based reinsurer could be a good place to park your money for a while.

Everest Re has a beta of less than one, meaning that it's less volatile than the market and would be less affected by a broad decline in stocks. Of course, if the market rises, you might not reap the gains you would for a riskier stock. However, its shares are trading for 14% less than analysts' average price target of $97, according to SNL Financial, so maybe safe isn't a bad place to be.

Everest Re is among the 20% of insurance stocks that rose in the past week. Not bad for a safe stock that's up 14% this year and 7.9% for the past 12 months. While its year-to-date gain trails the 15% advance of the S&P 500 Financials Index, the shares climbed even as the benchmark lost 30% in the past year.

There are better-known stocks with low betas, including Aetna (AET - Get Report) at 0.83, Berkshire Hathaway (BRK.A - Get Report) (BRK.B - Get Report) at 0.62 and WellPoint (WLP) at 0.68. But these stocks aren't as cheap as Everest shares. Everest Re's price-to-earnings ratio of 4.8 is far less than Aetna's 9.5, Berkshire's 11.5 and WellPoint's 9.4.

The company is also a strong bet based on price-to-book comparisons. Everest Re has a price-to-book ratio of 93, meaning the book value of the company's assets is more than the market capital. That compares to 115 for WellPoint and 143 for Aetna. While that doesn't make Everest Re a bargain stock, it leaves room for upward price movement.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
WLP $136.01 1.43%
AET $107.40 0.00%
BRK.A $217,000.10 0.00%
BRK.B $143.89 0.00%
RE $173.60 0.00%


DOW 17,712.66 +34.43 0.19%
S&P 500 2,061.02 +4.87 0.24%
NASDAQ 4,891.2190 +27.8570 0.57%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs