December 28, 2015
We often don’t notice the opportunities right in front of us. If you know where to look, you can find hidden gems in the market. The key is to grab them ahead of the crowd.
Here are three stocks that offer value, growth and income. You should consider buying these under-appreciated equities, as you re-position your dividend portfolio for 2016. Let’s take a look.
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Maiden Holdings provides reinsurance, insurance products and services to the regional and specialty property and casualty markets. The company’s markets are Europe and the U.S. The company has exhibited a continued ability to clock solid operating earnings and double-digit operating returns, despite the prevalence of a challenging environment.
During the third quarter and the first nine months of 2015, Maiden reported an operating return on common equity of 11.3% and 11.8%, respectively. It also displayed growth in invested assets and resilient year-over-year growth in investment incomes. For the first nine months of the year, gross premiums written were up 12% to $2.1 billion.
Let’s get down to why we like Maiden Holdings, and why it should be a part of your long-term income investment strategy.
First, the stock trades at attractive valuations. Its trading at about 7.3 times forward earnings compared to competitors like Swiss RE AG (10.8 times), Hannover Rueck SE ADR (nearly 8 times) and Arch Capital Group Ltd (17.1 times).
Second, Maiden Holdings sports a chunky 3.56% annual dividend yield. The high yield is not artificial since the stock has gained over 14% this year. It has more than doubled its annual dividend payouts from 26 cents a share in 2010 to an estimated 53 cents a share in 2015.
Third, the company offers solid growth prospects. Annual revenues are estimated to grow by 11% in the fiscal year 2015 over the fiscal year 2014. For 2016, top line growth is projected at about 6%.
More importantly, earnings-per-share (EPS) for the fiscal year 2015 will come in at about 3% but then go on to accelerate to over 30% for fiscal year 2016.