Allianz SE (ADR) (OTCMKTS:AZSEY) is on a 18% climb since the start of the year. The name may not ring a bell in the U.S., but in Europe the company is one of the largest insurers but operates in over 70 countries (which I will detail more below). The company has stable earnings and an established brand name. In addition, the company has excellent returns and impressive yields for shareholders, which make it a stock to watch.
Allianz is a global financial services company offering life/health insurance, property-casualty (P&C) insurance, and asset management products. It is one of the world’s largest insurance companies and is based in Munich, Germany. It has a market capitalization of about $89.38 billion and trades in the U.S. on the over-the-counter market.
Allianz SE (ADR) (OTCMKTS:AZSEY) has a few drawbacks because the European insurance landscape is in a low interest rate war. The company has changed it business model slightly in response.
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Another interesting aspect is that AZSEY is the owner of the U.S. asset manager PIMCO, making Allianz one of the largest active asset managers in the world. Measured by operating profit, its largest division is P&C generating about 46% of profit, followed by life (35%), while asset management is responsible for 19%.
Furthermore, news broke last week that AZSEY is exploring a plan to take Euler Hermes Group private, buying the shares it doesn’t already own in the French trade-credit insurer, according to a report in Bloomberg. AZSEY already owns about 63 percent of Euler, is speaking to advisers about acquiring the remaining stake, which has a market value of about 1.5 billion euros ($1.7 billion).
Allianz has stayed away from buyouts or acquisitions since the 2001 purchase of Dresdner Bank. Allianz ended that relationship in an emergency sale in 2008, weeks before the Lehman Brothers debacle. Its last major acquisition was a decade ago, when it purchased the remaining shares of Assurances Generales de France. Euler Hermes is the world’s biggest trade-credit insurer with a share of about a third of the world market.
In Mid-May, AZSEY reported that PIMCO stuck to its profit targets. Pimco attracted net investment inflows of 21 billion euros ($22.83 billion) in the first quarter, its strongest quarterly net inflows since the first quarter of 2013.vPimco’s strong performance marks the third consecutive quarter of net inflows for the bond fund powerhouse, and mirrors a strong start to the year seen by rivals including BlackRock .Pimco had experienced several years of cash withdrawals in some of its main funds, including its flagship Pimco Total Return Fund. Co-founder Bill Gross, known as “the Bond King” during his years at Pimco, left in 2014 for Janus Capital Group Inc.
Allianz SE (ADR) (OTCMKTS:AZSEY) is a stable company with strong management in a field where it has shown experience in making strong profits. The company has also shown to be shrewd in business and understands how to stay in the black. The company has also show evidence of share buybacks over the years, which is another positive for this interesting stock. For continuing coverage on shares of $AZSEY stock, as well as our other breakout picks, sign up for our free newsletter today and get our next hot stock pick!