SELECTIVE INSURANCE GROUP (SIGI)

US8163001071 - Common Stock

108.46  +1.04 (+0.97%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to SIGI. SIGI was compared to 140 industry peers in the Insurance industry. While SIGI is still in line with the averages on profitability rating, there are concerns on its financial health. SIGI is growing strongly while it is still valued neutral. This is a good combination!



5

1. Profitability

1.1 Basic Checks

In the past year SIGI was profitable.
In the past year SIGI had a positive cash flow from operations.
Each year in the past 5 years SIGI has been profitable.
SIGI had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

SIGI's Return On Assets of 3.02% is fine compared to the rest of the industry. SIGI outperforms 67.63% of its industry peers.
Looking at the Return On Equity, with a value of 12.05%, SIGI is in line with its industry, outperforming 56.12% of the companies in the same industry.
SIGI's Return On Invested Capital of 3.28% is fine compared to the rest of the industry. SIGI outperforms 74.82% of its industry peers.
The Average Return On Invested Capital over the past 3 years for SIGI is in line with the industry average of 4.02%.
Industry RankSector Rank
ROA 3.02%
ROE 12.05%
ROIC 3.28%
ROA(3y)2.93%
ROA(5y)2.88%
ROE(3y)11.27%
ROE(5y)11.04%
ROIC(3y)3.31%
ROIC(5y)3.26%

1.3 Margins

SIGI has a Profit Margin (8.43%) which is comparable to the rest of the industry.
SIGI's Profit Margin has improved in the last couple of years.
The Operating Margin of SIGI (11.31%) is comparable to the rest of the industry.
In the last couple of years the Operating Margin of SIGI has grown nicely.
Industry RankSector Rank
OM 11.31%
PM (TTM) 8.43%
GM N/A
OM growth 3Y-1.54%
OM growth 5Y3.81%
PM growth 3Y0.08%
PM growth 5Y4.04%
GM growth 3YN/A
GM growth 5YN/A

3

2. Health

2.1 Basic Checks

SIGI has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
SIGI has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, SIGI has more shares outstanding
SIGI has a better debt/assets ratio than last year.

2.2 Solvency

SIGI has a debt to FCF ratio of 0.68. This is a very positive value and a sign of high solvency as it would only need 0.68 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.68, SIGI belongs to the top of the industry, outperforming 81.30% of the companies in the same industry.
SIGI has a Debt/Equity ratio of 0.17. This is a healthy value indicating a solid balance between debt and equity.
SIGI's Debt to Equity ratio of 0.17 is fine compared to the rest of the industry. SIGI outperforms 76.26% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.17
Debt/FCF 0.68
Altman-Z N/A
ROIC/WACC0.38
WACC8.56%

2.3 Liquidity

Industry RankSector Rank
Current Ratio N/A
Quick Ratio N/A

7

3. Growth

3.1 Past

SIGI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 16.90%, which is quite good.
The Earnings Per Share has been growing by 9.95% on average over the past years. This is quite good.
Looking at the last year, SIGI shows a quite strong growth in Revenue. The Revenue has grown by 17.64% in the last year.
The Revenue has been growing by 10.30% on average over the past years. This is quite good.
EPS 1Y (TTM)16.9%
EPS 3Y12.41%
EPS 5Y9.95%
EPS growth Q2Q32.88%
Revenue 1Y (TTM)17.64%
Revenue growth 3Y12.97%
Revenue growth 5Y10.3%
Revenue growth Q2Q16.61%

3.2 Future

The Earnings Per Share is expected to grow by 22.61% on average over the next years. This is a very strong growth
Based on estimates for the next years, SIGI will show a quite strong growth in Revenue. The Revenue will grow by 10.03% on average per year.
EPS Next Y33.6%
EPS Next 2Y22.61%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year12.02%
Revenue Next 2Y10.03%
Revenue Next 3YN/A
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.

4

4. Valuation

4.1 Price/Earnings Ratio

SIGI is valuated rather expensively with a Price/Earnings ratio of 18.45.
The rest of the industry has a similar Price/Earnings ratio as SIGI.
SIGI is valuated rather cheaply when we compare the Price/Earnings ratio to 26.42, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 13.81, SIGI is valued correctly.
The rest of the industry has a similar Price/Forward Earnings ratio as SIGI.
SIGI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.74, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 18.45
Fwd PE 13.81

4.2 Price Multiples

SIGI's Enterprise Value to EBITDA ratio is in line with the industry average.
The rest of the industry has a similar Price/Free Cash Flow ratio as SIGI.
Industry RankSector Rank
P/FCF 8.93
EV/EBITDA 13.82

4.3 Compensation for Growth

The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
SIGI's earnings are expected to grow with 22.61% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.55
PEG (5Y)1.85
EPS Next 2Y22.61%
EPS Next 3YN/A

6

5. Dividend

5.1 Amount

SIGI has a Yearly Dividend Yield of 1.34%. Purely for dividend investing, there may be better candidates out there.
SIGI's Dividend Yield is comparable with the industry average which is at 4.13.
Compared to an average S&P500 Dividend Yield of 2.34, SIGI's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 1.34%

5.2 History

On average, the dividend of SIGI grows each year by 13.85%, which is quite nice.
SIGI has paid a dividend for at least 10 years, which is a reliable track record.
SIGI has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)13.85%
Div Incr Years10
Div Non Decr Years15

5.3 Sustainability

23.32% of the earnings are spent on dividend by SIGI. This is a low number and sustainable payout ratio.
The dividend of SIGI is growing, but earnings are growing more, so the dividend growth is sustainable.
DP23.32%
EPS Next 2Y22.61%
EPS Next 3YN/A

SELECTIVE INSURANCE GROUP

NASDAQ:SIGI (3/28/2024, 3:39:30 PM)

108.46

+1.04 (+0.97%)

Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap6.58B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 1.34%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(16)
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Revenue beat(2)
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Min Revenue beat(2)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 18.45
Fwd PE 13.81
P/S
P/FCF
P/OCF
P/B
P/tB
EV/EBITDA
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.55
PEG (5Y)1.85
Profitability
Industry RankSector Rank
ROA 3.02%
ROE 12.05%
ROCE
ROIC
ROICexc
ROICexgc
OM 11.31%
PM (TTM) 8.43%
GM N/A
FCFM
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.36
Health
Industry RankSector Rank
Debt/Equity 0.17
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio N/A
Quick Ratio N/A
Altman-Z
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)16.9%
EPS 3Y12.41%
EPS 5Y
EPS growth Q2Q
EPS Next Y33.6%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)17.64%
Revenue growth 3Y12.97%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y