Morningstar | Aegon's 1H Lower Below the Line, Outflows Encouraging; Shares Undervalued
Aegon reported first-half results, with small broad-based improvement across all divisions. We are holding our fair value estimate at EUR 6.20 per share and maintaining our no-moat rating.What we like about this release are the generally lower--more explainable as nonrecurring--below-the-line items. For example, fair value items came in at negative EUR 3 million, impairment was nonexistent, and the runoff result was negative EUR 7 million. Though the other income/charges line was again negative, this was a result of a loss on the sale of the Ireland division.
Net deposits were a little light but have at least turned positive. The main driver of the drag continues to be Americas retirement, where the Mercer acquisition again saw outflows on the back of underlying acquisitions where the acquirer was not a client of Mercer/Transamerica.
Aegon has struggled with below-the-line items and outflows for quite some time. These results show signs that the business is beginning to normalise.
AEGON is a holding company. Through its subsidiaries, Co. provides life insurance and pensions operations in more than 20 countries in the Americas, Europe and Asia and is also active in savings and asset management operations, accident and health insurance, general insurance and to a limited extent banking operations. Co. operates through the following segments: the Americas (which includes the U.S.A., Mexico and Brazil); the Netherlands; the United Kingdom; Central & Eastern Europe; Spain and Portugal; Asia and Aegon Asset Management.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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