Greenlight Capital Re, Ltd. (NASDAQ:GLRE) is a reinsurance company that provides property and casualty reinsurance products. The company operates in a competitive industry alongside peers like Global Indemnity Group, LLC, National Western Life Group, Inc., Enstar Group Limited, AMERISAFE, Inc., and Hallmark Financial Services, Inc. These companies are evaluated based on their ability to generate returns on invested capital compared to their cost of capital.
Greenlight Capital Re, Ltd. has a Return on Invested Capital (ROIC) of 10.33% and a Weighted Average Cost of Capital (WACC) of 7.13%. This results in a ROIC to WACC ratio of 1.45, indicating that GLRE is generating returns above its cost of capital. This is a positive indicator for investors, as it suggests efficient capital utilization.
In comparison, Global Indemnity Group, LLC has a ROIC of 0.03% and a WACC of 5.84%, resulting in a ROIC to WACC ratio of 0.004. This suggests that GBLI is not generating sufficient returns to cover its cost of capital. Similarly, National Western Life Group, Inc. has a ROIC of 0.85% and a WACC of 7.62%, with a ROIC to WACC ratio of 0.11, indicating a similar challenge.
Enstar Group Limited shows a slightly better performance with a ROIC of 2.06% and a WACC of 6.61%, resulting in a ROIC to WACC ratio of 0.31. However, AMERISAFE, Inc. outperforms these peers with a ROIC of 14.20% and a WACC of 5.77%, achieving a ROIC to WACC ratio of 2.46, indicating strong capital efficiency.
Hallmark Financial Services, Inc. stands out with an exceptional ROIC of 168.67% and a WACC of 3.45%, leading to a ROIC to WACC ratio of 48.86. This suggests that Hallmark is utilizing its capital extremely efficiently compared to its peers, making it an attractive option for investors seeking high capital efficiency.
