In Our 2024 Investment Strategy for Equities, we introduced our DIVOS™ strategy and today, we initiated a very small position in SSREY (Swiss Re AG) and intend to hold and accumulate this stock for the foreseeable future.
Here’s how we think it fits our DIVOS model.
Demographics
Swiss RE is an insurance firm that provides wholesale reinsurance, insurance, other insurance-based forms of risk transfer, and other insurance-related services worldwide. Think of it as the Swiss army knife of insurance and we are bullish on insurance companies. Every human being on earth that owns a vehicle, home or conducts business has to carry some type of insurance day to day so we love the business model.
Income
SSREY currently has a dividend of 5.47 percent and has an upcoming ex-dividend date of April 16, 2024. The firm has had 5 year dividend grow of 4.53 percent and while dividend growth has been volatile over a long period of time, we think it’s a good income generator for our portfolio.
Value
We like SSREY because it features a whopping $223k of income per employee. Always remember that our thesis is that skilled labor is being depleted rapidly due to the global aging of the population so we expect firms to be able to do more with less labor. We think that companies that are already optimized to generate high revenue per employee will do better than those firms don’t have the same capabilities or strategies.
Options
SSREY has no options traded on the U.S. stock exchanges and while we will miss out on squeezing additional income from trading calls and puts, we like SSRey’s future outlook so we had to have it for our portfolio long term.
S&P 500
Swiss RE isn’t a member of the S&P 500 however it is the 2nd largest insurance company in Switzerland so we feel comfortable fitting this into our international diversification in our equity portfolio. We set our stock to DRIP and will let it grow over the long term.
We’ll let you know as we accumulate more and it may be a while since the stock market keeps shooting for the moon and it’s harder and harder to find value. Stay tuned, stay profitable and stay solvent…