HAMILTON INSURANCE GROUP-CL B (NYSE:HG) – An Undervalued Stock Worth a Closer Look

HAMILTON INSURANCE GROUP-CL B (NYSE:HG) was identified by our Decent Value stock screener as a potential opportunity for value investors. The company’s fundamentals suggest it may be undervalued while maintaining reasonable growth, profitability, and financial health. Below, we examine why HG stands out.

Valuation

HG’s valuation metrics indicate the stock may be trading below its intrinsic value:

• P/E Ratio: At 6.78, HG’s P/E is well below both the industry average (39.88) and the S&P 500 average (27.30).
• Forward P/E: The forward P/E of 4.82 suggests further upside potential.
• Enterprise Value/EBITDA: 87.6% of industry peers are more expensive based on this metric.

These figures suggest HG is priced attractively relative to its earnings potential.

Financial Health

While HG’s financial health is rated as average, several positives stand out:

• Low Debt: A Debt/Equity ratio of 0.06 indicates minimal reliance on borrowing.
• Strong Solvency: A Debt-to-FCF ratio of 0.24 means the company could pay off its debt quickly.
• Improving Metrics: The debt/assets ratio has improved compared to last year.

However, liquidity ratios (Current and Quick Ratios at 0.18) are weak, which warrants caution.

Profitability

HG’s profitability is solid, with key strengths including:

• Return on Assets (3.89%) and Return on Equity (13.51%) outperform most industry peers.
• Operating Margin (20.48%) is strong, ranking above 80% of competitors.
• Recent improvements in operating efficiency suggest further upside.

Growth

Despite a slight dip in EPS last year, growth prospects remain encouraging:

• Revenue Growth: Up 31.23% YoY, with a 3-year average growth of 176.06%.
• Future Estimates: Analysts project annual EPS growth of 8.03% and revenue growth of 11.80%.

While past earnings have been volatile, the forward outlook supports a positive case.

Our Decent Value screener lists more stocks with similar characteristics.
For a deeper analysis, review the full fundamental report on HG.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.