Yahoo Finance Financial Stocks: Is Now The Time To Buy Allianz SE (FRA:ALV)?
Allianz SE (DB:ALV), a €78.20B large-cap, operates in the insurance industry, which is a large constituent of the economy by virtue of the amount of premiums it collects and the role it plays by covering personal and business risks. Financial services analysts are forecasting for the entire industry, a strong double-digit growth of 11.54% in the upcoming year , and a strong near-term growth of 28.12% over the next couple of years. However, this rate came in below the growth rate of the DE stock market as a whole. Below, I will examine the sector growth prospects, and also determine whether Allianz is a laggard or leader relative to its financial sector peers. View our latest analysis for Allianz
What’s the catalyst for Allianz’s sector growth?
Amid challenges from regulatory disruption, increasing consumer expectations and sluggish sales, insurers will increasingly consider technology integration to drive growth and efficiency. In the previous year, the industry saw growth of 4.83%, though still underperforming the wider DE stock market. Allianz leads the pack with its impressive earnings growth of 8.72% over the past year. However, analysts are expecting its future earnings growth to be more in-line with the industry average, hovering at 11.92% over the next couple of years.
Is Allianz and the sector relatively cheap?
The insurance industry is trading at a PE ratio of 13.66x, relatively similar to the rest of the DE stock market PE of 18.45x. This illustrates a fairly valued sector relative to the rest of the market, indicating low mispricing opportunities. However, the industry returned a lower 9.40% compared to the market’s 11.43%, potentially indicative of past headwinds. On the stock-level, Allianz is trading at a PE ratio of 11.53x, which is relatively in-line with the average insurance stock. In terms of returns, Allianz generated 11.10% in the past year, which is 1.70% over the insurance sector.
Next Steps:
Allianz’s future growth prospect aligns with that of the broader market and it is trading in-line with its peers. So if you like its growth prospects, you’ll be paying a fair value for the company. If the stock has been on your watchlist for a while, now may be the time to enter. However, before you make a decision on the stock, I suggest you look at Allianz’s fundamentals in order to build a holistic investment thesis.
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Historical Track Record: What has ALV’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Allianz? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
