PartnerRe Declares New Buyback to Boost Shareholder Value - Analyst Blog

The board of PartnerRe Ltd. (PRE) has authorized a new stock repurchase worth 5.0 million shares. The latest sanction, to be effective immediately replaces the 6.0 million share repurchase authorized in Sep 2013.

This property-casualty and life reinsurer bought back about 1.3 million shares for $133 million during the second quarter of 2014. Overall, the company repurchased 3.1 million shares in the first half of 2014 for $313 million. However, this was lower than $492 million worth of shares bought back in the first half of 2013. An additional 0.15 million shares were repurchased for $16 million in July.

Following this, the company was left with about 1.7 million shares available for repurchase from the prior authorization. Moreover, PartnerRe has approximately 37.3 million common shares, which were held in treasury and are now available for re-issuance.

PartnerRe has a history of steady capital deployment, thereby increasing shareholders' returns. The company returned $1.1 billion in 2010, $396.2 million in 2011, $32.9 million in 2012 and $695 million in 2013 through stock repurchases. Although the volume of share buybacks has witnessed fluctuation, PartnerRe has remained consistent in sharing its wealth with investors.

Additionally, the company has hiked its annual dividend by 9% in Apr 2011, followed by a 3% hike in the February of 2012 and 2013, and another 5% accretion in Jan 2014. The latest hike represents the 21^st consecutive year of dividend rise since the company's commencement of operations.

The latest expansion in stock repurchases further reflects PartnerRe's commitment to generate higher cash flows, driven by higher return on equity. Improved macro factors stemming from market recovery along with a prudently-managed and risk-free balance sheet should continue to support capital deployment in the future as well.

Currently, PartnerRe carries a Zacks Rank #3 (Hold). Investors interested in the same sector could consider stockslike Mercury General Corporation (MCY), AmTrust Financial Services Inc. (AFSI) and Endurance Specialty Holdings Ltd. (ENH), all of whichsport a Zacks Rank #1 (Strong Buy).

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