Tryg (Hold, TP: DKK220.00) - Capital efficiency
Tryg’s Q4 results were in line with our expectations with the revaluation of a property the main contributor to a small EPS beat. Tryg illustrated its ambition of returning capital to its shareholders by announcing a DKK1.65/share extraordinary dividend. We have made some minor positive estimate changes and raised our target price to DKK220 (200). We find the valuation fairly demanding at a 2020e P/E of 25x and the lowest dividend yield (3.7%) among the Nordic P&C insurers. However, we acknowledge the company’s positive qualities with strict capital discipline, steady earnings and dividend payments, and reiterate our HOLD.Tryg is an insurance company, engaged in providing insurance services. Co.'s private segment encompasses the sale of insurance products to private individuals in Denmark and Norway. Co.'s commercial segment encompasses the sale of insurance products to small and medium-sized businesses in Denmark and Norway. Co.'s corporate segment sells insurance products to corporate customers under the brand Tryg in Denmark and Norway, Moderna in Sweden and Tryg Garanti. Co.'s Sweden segment comprises the sale of insurance products to private customers under the Moderna brand. Moreover, insurance is sold under the brands Atlantica, Bilsport & MC, Securator and Moderna Djurforsakringar.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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