Markets are quick to reward fast-growing companies, at least until that growth stops. Companies that have a more slow-and-steady approach tend to get overlooked. But over time, their returns can equal that of a growth company, with far less volatility.
Given how markets are pushing to all-time highs on the back of growth stocks, now may be the ideal time to look for more steadier stocks that can keep delivering, no matter what happens in the economy.
One sector that tends to deliver great long-term results is insurance. It’s a highly-regulated, but highly-profitable business. And one sub-sector is reinsurance, which helps insurance companies balance their risks.
Everest Group (EG) is a slow and steady player. Shares are up 8% over the pats year, but revenues are up by 16%. Everest is already cheap at 6 times earnings, and the long-term growth prospects should allow shares to carry a higher valuation premium over time.
Action to take: Investors may like shares here. Everest pays a 2.1% dividend at current prices, and just increased their payout. More increases are likely over time, as their payout is currently just 10% of their earnings.
For traders, the company’s slow-and-steady approach may not mean a big move higher. But the January 2025 $410 calls, last trading for about $13.50, could see mid-double-digit gains as shares of the reinsurer continues to slowly rise.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.