This FTSE 100 is quietly soaring after stellar FY results! Time to buy?

I reckon this FTSE 100 has been going under the radar, and recently posted excellent full-year results. Should I buy some shares?

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FTSE 100 incumbent Beazley (LSE: BEZ) has been on a great upward trajectory recently, without any fuss or frills.

This was made even better by a recent impressive full-year update posted earlier this month.

Let’s take a look at whether now is still a good time for me to buy some shares with a view to returns and growth.

Lloyd’s of London insurer

The business operates in the insurance industry, and offers a plethora of products. These include reinsurance, business, accident, life, cybersecurity, contingency business, and more. It operates globally with a good presence in the US, Europe, and the Middle East.

Beazley shares are up 19% over a 12-month period, from 569p at this time last year, to current levels of 678p. Since early January, the shares are up 34% from 501p, to current levels.

Recent results and positives

Let’s start by breaking down full-year results for the year ended 31 December 2023, posted on 7 March. The headline for me was a 155% rise in profit before tax from $584m in 2022, to a record $1.254bn. Insurance written premiums increased by 7%, and net insurance premiums rose by an impressive 24%. Earnings per share increased by a whopping 97%. An interim dividend of 14.7p and a share buyback scheme were also announced.

It’s not hard to understand why the shares are climbing after such positive results.

At present, Beazley shares offer a dividend yield of just over 2%, well covered by a healthy balance sheet. This isn’t the highest, but if the firm can continue its impressive run, I don’t see why this level of return can’t grow too. However, I’m conscious that dividends aren’t guaranteed, and past performance is not an indicator of the future.

Finally, the firm’s exposure to global markets, especially the US, offers it exciting opportunities for rapid growth. This is something I’ll keep an eye on.

Risks and my verdict

From a bearish view, the shares are a tad expensive for my liking, trading on a price-to-earnings ratio of over 30. It would have been a shrewd move to buy the shares last year, before this recent great run began. Alas, hindsight is a wonderful thing. Buying the shares now, after a good set of results, could be risky. Any less-than-stellar performance, or other issues, could send the shares tumbling.

The cyclical nature of the insurance business is always a worry for me. One-off events could increase payouts Beazley may need to make. A prime example of this was the pandemic, which led the business to pay out unprecedented levels of claims, and eventually record a $50m loss for 2020.

Overall, I like Beazley, as a business and a potential investment. However, the current valuation is putting me off.

I’d love to buy some shares when I next can, but only when there’s a better entry point. Buying shares when they’re on the up after a great set of results or positive move is something I try and avoid.

I’ll keep the shares on my watch list for now.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Sumayya Mansoor has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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