No one has the proverbial crystal ball, but after the momentum attributed to Assured Guaranty’s (symbol AGO) solid fourth-quarter and full-year 2013 earnings results, the shares of the specialty insurer soared Thursday to a new 52-week high of $26.54 before ending the day at $25.54.
AGO has now recorded a 1-year return of nearly 40%, which solidly beats the S&P 500 return of about 22% after Thursday’s correction. According to Zacks Equity Research the fourth-quarter earnings figure at Assured Guaranty attained were a positive surprise beat of 10.6% while the top line exceeded the Zacks Consensus Estimate by 16.3%.
“This takes forward the company’s robust earnings performance wherein it delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 22.4%. Year 2013 also marked the fourth consecutive year with an operating income that exceeded $0.5 billion at the company.
“Assured Guaranty’s total expenses fell by nearly 27.9% year over year primarily owing to lower loss expense that plunged 47.2% in the quarter, largely attributable to decline in U.S. residential mortgage-backed securities (RMBS) losses. However, higher U.S. public finance losses were a partial offset”, Zacks reported.
To sweeten AGO’s investment attraction during 2013 the company spent $264 million to repurchase 12.5 million shares besides having $400 million remaining under its authorization.
Also the board of directors increased its quarterly dividend by 10%, marking three straight years of dividend hikes and bringing the total increase to 144% since its Nov 2011 dividend payment. The dividend yield is close to 1.72% currently.
According to Yahoo! Finance Assured Guaranty Ltd., through its subsidiaries, provides credit protection products to public finance, infrastructure, and structured finance markets in the United States and internationally. It offers insurance that protect holders of debt instruments and other monetary obligations from defaults in scheduled payments, including scheduled interest and principal payments.
