RLI CORP (RLI) Stock Fundamental Analysis
NYSE:RLI - New York Stock Exchange, Inc. - US7496071074 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to RLI. RLI was compared to 143 industry peers in the Insurance industry. While RLI belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. RLI is quite expensive at the moment. It does show a decent growth rate.
1. Profitability
1.1 Basic Checks
RLI had positive earnings in the past year.
In the past year RLI had a positive cash flow from operations.
RLI had positive earnings in each of the past 5 years.
Each year in the past 5 years RLI had a positive operating cash flow.
1.2 Ratios
The Return On Assets of RLI (6.14%) is better than 90.91% of its industry peers.
With an excellent Return On Equity value of 22.72%, RLI belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
RLI's Return On Invested Capital of 5.90% is amongst the best of the industry. RLI outperforms 84.62% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for RLI is above the industry average of 4.35%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.14% | ||
| ROE | 22.72% | ||
| ROIC | 5.9% |
ROA(3y)8.09%
ROA(5y)6.89%
ROE(3y)31.27%
ROE(5y)26.07%
ROIC(3y)8.57%
ROIC(5y)7.05%
1.3 Margins
The Profit Margin of RLI (20.04%) is better than 88.11% of its industry peers.
RLI's Profit Margin has been stable in the last couple of years.
RLI's Operating Margin of 22.81% is amongst the best of the industry. RLI outperforms 81.82% of its industry peers.
In the last couple of years the Operating Margin of RLI has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 22.81% | ||
| PM (TTM) | 20.04% | ||
| GM | N/A |
OM growth 3Y-2.46%
OM growth 5Y2.54%
PM growth 3Y-6.23%
PM growth 5Y0.45%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so RLI is destroying value.
Compared to 1 year ago, RLI has more shares outstanding
RLI has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, RLI has an improved debt to assets ratio.
2.2 Solvency
RLI has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.18 | ||
| Altman-Z | N/A |
ROIC/WACC0.66
WACC8.94%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
RLI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.42%, which is quite good.
Measured over the past years, RLI shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.43% on average per year.
Looking at the last year, RLI shows a quite strong growth in Revenue. The Revenue has grown by 12.07% in the last year.
Measured over the past years, RLI shows a quite strong growth in Revenue. The Revenue has been growing by 12.02% on average per year.
EPS 1Y (TTM)9.42%
EPS 3Y14.04%
EPS 5Y17.43%
EPS Q2Q%-2.65%
Revenue 1Y (TTM)12.07%
Revenue growth 3Y14.5%
Revenue growth 5Y12.02%
Sales Q2Q%15.21%
3.2 Future
RLI is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 3.51% yearly.
Based on estimates for the next years, RLI will show a small growth in Revenue. The Revenue will grow by 4.01% on average per year.
EPS Next Y8.26%
EPS Next 2Y6.11%
EPS Next 3Y3.51%
EPS Next 5YN/A
Revenue Next Year5.13%
Revenue Next 2Y4.91%
Revenue Next 3Y4.01%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 26.18, the valuation of RLI can be described as expensive.
73.43% of the companies in the same industry are cheaper than RLI, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 24.21, RLI is valued at the same level.
Based on the Price/Forward Earnings ratio of 23.09, the valuation of RLI can be described as rather expensive.
72.03% of the companies in the same industry are cheaper than RLI, based on the Price/Forward Earnings ratio.
RLI's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 20.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.18 | ||
| Fwd PE | 23.09 |
4.2 Price Multiples
RLI's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of RLI is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.33 | ||
| EV/EBITDA | 17.15 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates RLI does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of RLI may justify a higher PE ratio.
PEG (NY)3.17
PEG (5Y)1.5
EPS Next 2Y6.11%
EPS Next 3Y3.51%
5. Dividend
5.1 Amount
With a yearly dividend of 0.82%, RLI is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 3.26, RLI is paying slightly less dividend.
With a Dividend Yield of 0.82, RLI pays less dividend than the S&P500 average, which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
5.2 History
The dividend of RLI is nicely growing with an annual growth rate of 12.36%!
RLI has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of RLI decreased recently.
Dividend Growth(5Y)12.36%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
RLI pays out 68.15% of its income as dividend. This is not a sustainable payout ratio.
RLI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP68.15%
EPS Next 2Y6.11%
EPS Next 3Y3.51%
74.62
+0.34 (+0.46%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners81.94%
Inst Owner Change18.41%
Ins Owners0.85%
Ins Owner Change1.66%
Market Cap6.85B
Analysts67.69
Price Target81.35 (9.02%)
Short Float %1.54%
Short Ratio3.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.82% |
Yearly Dividend3.43
Dividend Growth(5Y)12.36%
DP68.15%
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)5.64%
Min EPS beat(2)-21.72%
Max EPS beat(2)33%
EPS beat(4)3
Avg EPS beat(4)13.87%
Min EPS beat(4)-21.72%
Max EPS beat(4)33%
EPS beat(8)6
Avg EPS beat(8)87.04%
EPS beat(12)9
Avg EPS beat(12)66.49%
EPS beat(16)13
Avg EPS beat(16)58.25%
Revenue beat(2)1
Avg Revenue beat(2)-1.77%
Min Revenue beat(2)-5.61%
Max Revenue beat(2)2.08%
Revenue beat(4)3
Avg Revenue beat(4)0.19%
Min Revenue beat(4)-5.61%
Max Revenue beat(4)2.64%
Revenue beat(8)5
Avg Revenue beat(8)0.02%
Revenue beat(12)8
Avg Revenue beat(12)12.78%
Revenue beat(16)11
Avg Revenue beat(16)13.98%
PT rev (1m)-2.51%
PT rev (3m)-2.51%
EPS NQ rev (1m)-1.37%
EPS NQ rev (3m)-2.07%
EPS NY rev (1m)0.08%
EPS NY rev (3m)0.08%
Revenue NQ rev (1m)-2.89%
Revenue NQ rev (3m)0.02%
Revenue NY rev (1m)-1.32%
Revenue NY rev (3m)-1.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.18 | ||
| Fwd PE | 23.09 | ||
| P/S | 3.97 | ||
| P/FCF | 12.33 | ||
| P/OCF | 12.22 | ||
| P/B | 4.5 | ||
| P/tB | 4.66 | ||
| EV/EBITDA | 17.15 |
EPS(TTM)2.85
EY3.82%
EPS(NY)3.23
Fwd EY4.33%
FCF(TTM)6.05
FCFY8.11%
OCF(TTM)6.1
OCFY8.18%
SpS18.8
BVpS16.58
TBVpS16
PEG (NY)3.17
PEG (5Y)1.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.14% | ||
| ROE | 22.72% | ||
| ROCE | 7.3% | ||
| ROIC | 5.9% | ||
| ROICexc | 5.94% | ||
| ROICexgc | 7.35% | ||
| OM | 22.81% | ||
| PM (TTM) | 20.04% | ||
| GM | N/A | ||
| FCFM | 32.2% |
ROA(3y)8.09%
ROA(5y)6.89%
ROE(3y)31.27%
ROE(5y)26.07%
ROIC(3y)8.57%
ROIC(5y)7.05%
ROICexc(3y)8.63%
ROICexc(5y)7.12%
ROICexgc(3y)10.98%
ROICexgc(5y)8.97%
ROCE(3y)10.61%
ROCE(5y)8.72%
ROICexcg growth 3Y3.78%
ROICexcg growth 5Y5.67%
ROICexc growth 3Y3.88%
ROICexc growth 5Y4.97%
OM growth 3Y-2.46%
OM growth 5Y2.54%
PM growth 3Y-6.23%
PM growth 5Y0.45%
GM growth 3YN/A
GM growth 5YN/A
F-Score7
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0.18 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 61.46% | ||
| Cap/Sales | 0.27% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 139.67% | ||
| Profit Quality | 160.65% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score7
WACC8.94%
ROIC/WACC0.66
Cap/Depr(3y)68.15%
Cap/Depr(5y)78.89%
Cap/Sales(3y)0.33%
Cap/Sales(5y)0.46%
Profit Quality(3y)117.68%
Profit Quality(5y)130.35%
High Growth Momentum
Growth
EPS 1Y (TTM)9.42%
EPS 3Y14.04%
EPS 5Y17.43%
EPS Q2Q%-2.65%
EPS Next Y8.26%
EPS Next 2Y6.11%
EPS Next 3Y3.51%
EPS Next 5YN/A
Revenue 1Y (TTM)12.07%
Revenue growth 3Y14.5%
Revenue growth 5Y12.02%
Sales Q2Q%15.21%
Revenue Next Year5.13%
Revenue Next 2Y4.91%
Revenue Next 3Y4.01%
Revenue Next 5YN/A
EBIT growth 1Y4.93%
EBIT growth 3Y11.69%
EBIT growth 5Y14.87%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y21.2%
FCF growth 3Y13.83%
FCF growth 5Y15.53%
OCF growth 1Y20.67%
OCF growth 3Y13.33%
OCF growth 5Y15.13%