SELECTIVE INSURANCE GROUP (SIGI) Stock Fundamental Analysis
NASDAQ:SIGI - Nasdaq - US8163001071 - Common Stock - Currency: USD
Overall SIGI gets a fundamental rating of 5 out of 10. We evaluated SIGI against 143 industry peers in the Insurance industry. There are concerns on the financial health of SIGI while its profitability can be described as average. SIGI is not valued too expensively and it also shows a decent growth rate. Finally SIGI also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
SIGI had positive earnings in the past year.
SIGI had a positive operating cash flow in the past year.
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 has a Return On Assets (2.59%) which is comparable to the rest of the industry.
SIGI has a Return On Equity (11.11%) which is in line with its industry peers.
The Return On Invested Capital of SIGI (2.89%) is better than 60.84% 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 4.05%.
The last Return On Invested Capital (2.89%) for SIGI is above the 3 year average (2.53%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.59% | ||
| ROE | 11.11% | ||
| ROIC | 2.89% |
ROA(3y)2.16%
ROA(5y)2.56%
ROE(3y)8.97%
ROE(5y)9.83%
ROIC(3y)2.53%
ROIC(5y)2.91%
1.3 Margins
The Profit Margin of SIGI (7.33%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of SIGI has declined.
SIGI has a Operating Margin of 10.15%. This is comparable to the rest of the industry: SIGI outperforms 49.65% of its industry peers.
In the last couple of years the Operating Margin of SIGI has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.15% | ||
| PM (TTM) | 7.33% | ||
| GM | N/A |
OM growth 3Y-27.44%
OM growth 5Y-14.64%
PM growth 3Y-29.7%
PM growth 5Y-15.65%
GM growth 3YN/A
GM growth 5YN/A
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.
The number of shares outstanding for SIGI has been increased compared to 5 years ago.
Compared to 1 year ago, SIGI has an improved debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of SIGI is 0.80, which is an excellent value as it means it would take SIGI, only 0.80 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of SIGI (0.80) is better than 72.03% of its industry peers.
A Debt/Equity ratio of 0.27 indicates that SIGI is not too dependend on debt financing.
SIGI has a better Debt to Equity ratio (0.27) than 60.84% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 0.8 | ||
| Altman-Z | N/A |
ROIC/WACC0.34
WACC8.46%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
SIGI shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 65.49%, which is quite impressive.
Measured over the past years, SIGI shows a decrease in Earnings Per Share. The EPS has been decreasing by -5.88% on average per year.
The Revenue has grown by 12.21% in the past year. This is quite good.
The Revenue has been growing by 11.27% on average over the past years. This is quite good.
EPS 1Y (TTM)65.49%
EPS 3Y-19.76%
EPS 5Y-5.88%
EPS Q2Q%219.09%
Revenue 1Y (TTM)12.21%
Revenue growth 3Y13.01%
Revenue growth 5Y11.27%
Sales Q2Q%5.1%
3.2 Future
Based on estimates for the next years, SIGI will show a very strong growth in Earnings Per Share. The EPS will grow by 27.83% on average per year.
SIGI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 6.85% yearly.
EPS Next Y122.53%
EPS Next 2Y62.56%
EPS Next 3Y27.83%
EPS Next 5YN/A
Revenue Next Year7.7%
Revenue Next 2Y7.31%
Revenue Next 3Y6.85%
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.
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
SIGI is valuated correctly with a Price/Earnings ratio of 12.99.
SIGI's Price/Earnings is on the same level as the industry average.
SIGI is valuated cheaply when we compare the Price/Earnings ratio to 26.82, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 9.21 indicates a reasonable valuation of SIGI.
Compared to the rest of the industry, the Price/Forward Earnings ratio of SIGI is on the same level as its industry peers.
The average S&P500 Price/Forward Earnings ratio is at 36.21. SIGI is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.99 | ||
| Fwd PE | 9.21 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of SIGI is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of SIGI indicates a somewhat cheap valuation: SIGI is cheaper than 74.13% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.25 | ||
| EV/EBITDA | 10.21 |
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.
A more expensive valuation may be justified as SIGI's earnings are expected to grow with 27.83% in the coming years.
PEG (NY)0.11
PEG (5Y)N/A
EPS Next 2Y62.56%
EPS Next 3Y27.83%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.95%, SIGI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.36, SIGI has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.39, SIGI has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.95% |
5.2 History
On average, the dividend of SIGI grows each year by 13.90%, which is quite nice.
SIGI has paid a dividend for at least 10 years, which is a reliable track record.
SIGI has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)13.9%
Div Incr Years11
Div Non Decr Years34
5.3 Sustainability
SIGI pays out 26.11% of its income as dividend. This is a sustainable payout ratio.
SIGI's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP26.11%
EPS Next 2Y62.56%
EPS Next 3Y27.83%
79.09
+1.62 (+2.09%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners86.25%
Inst Owner Change0%
Ins Owners0.82%
Ins Owner Change4.12%
Market Cap4.81B
Analysts74.29
Price Target96.56 (22.09%)
Short Float %2.73%
Short Ratio3.44
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.95% |
Yearly Dividend1.55
Dividend Growth(5Y)13.9%
DP26.11%
Div Incr Years11
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-10.65%
Min EPS beat(2)-14.75%
Max EPS beat(2)-6.55%
EPS beat(4)0
Avg EPS beat(4)-14.52%
Min EPS beat(4)-20.05%
Max EPS beat(4)-6.55%
EPS beat(8)0
Avg EPS beat(8)-33.62%
EPS beat(12)0
Avg EPS beat(12)-25.12%
EPS beat(16)2
Avg EPS beat(16)-18.25%
Revenue beat(2)0
Avg Revenue beat(2)-4%
Min Revenue beat(2)-4.76%
Max Revenue beat(2)-3.24%
Revenue beat(4)0
Avg Revenue beat(4)-3.17%
Min Revenue beat(4)-4.76%
Max Revenue beat(4)-1.3%
Revenue beat(8)3
Avg Revenue beat(8)-0.9%
Revenue beat(12)6
Avg Revenue beat(12)0.53%
Revenue beat(16)8
Avg Revenue beat(16)1.13%
PT rev (1m)0%
PT rev (3m)1.07%
EPS NQ rev (1m)-1.81%
EPS NQ rev (3m)-6.22%
EPS NY rev (1m)-0.4%
EPS NY rev (3m)-3.4%
Revenue NQ rev (1m)-0.39%
Revenue NQ rev (3m)-0.08%
Revenue NY rev (1m)-0.7%
Revenue NY rev (3m)-1.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.99 | ||
| Fwd PE | 9.21 | ||
| P/S | 0.94 | ||
| P/FCF | 4.25 | ||
| P/OCF | 4.11 | ||
| P/B | 1.43 | ||
| P/tB | 1.43 | ||
| EV/EBITDA | 10.21 |
EPS(TTM)6.09
EY7.7%
EPS(NY)8.59
Fwd EY10.86%
FCF(TTM)18.63
FCFY23.55%
OCF(TTM)19.24
OCFY24.32%
SpS83.96
BVpS55.37
TBVpS55.24
PEG (NY)0.11
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.59% | ||
| ROE | 11.11% | ||
| ROCE | 3.61% | ||
| ROIC | 2.89% | ||
| ROICexc | 2.89% | ||
| ROICexgc | 3.22% | ||
| OM | 10.15% | ||
| PM (TTM) | 7.33% | ||
| GM | N/A | ||
| FCFM | 22.18% |
ROA(3y)2.16%
ROA(5y)2.56%
ROE(3y)8.97%
ROE(5y)9.83%
ROIC(3y)2.53%
ROIC(5y)2.91%
ROICexc(3y)2.53%
ROICexc(5y)2.91%
ROICexgc(3y)2.82%
ROICexgc(5y)3.24%
ROCE(3y)3.16%
ROCE(5y)3.64%
ROICexcg growth 3Y-24.16%
ROICexcg growth 5Y-12.63%
ROICexc growth 3Y-24.74%
ROICexc growth 5Y-12.9%
OM growth 3Y-27.44%
OM growth 5Y-14.64%
PM growth 3Y-29.7%
PM growth 5Y-15.65%
GM growth 3YN/A
GM growth 5YN/A
F-Score7
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.27 | ||
| Debt/FCF | 0.8 | ||
| Debt/EBITDA | 1.64 | ||
| Cap/Depr | 117.46% | ||
| Cap/Sales | 0.73% | ||
| Interest Coverage | 18.13 | ||
| Cash Conversion | 212.75% | ||
| Profit Quality | 302.67% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score7
WACC8.46%
ROIC/WACC0.34
Cap/Depr(3y)75.11%
Cap/Depr(5y)60.57%
Cap/Sales(3y)0.63%
Cap/Sales(5y)0.66%
Profit Quality(3y)369.06%
Profit Quality(5y)302.6%
High Growth Momentum
Growth
EPS 1Y (TTM)65.49%
EPS 3Y-19.76%
EPS 5Y-5.88%
EPS Q2Q%219.09%
EPS Next Y122.53%
EPS Next 2Y62.56%
EPS Next 3Y27.83%
EPS Next 5YN/A
Revenue 1Y (TTM)12.21%
Revenue growth 3Y13.01%
Revenue growth 5Y11.27%
Sales Q2Q%5.1%
Revenue Next Year7.7%
Revenue Next 2Y7.31%
Revenue Next 3Y6.85%
Revenue Next 5YN/A
EBIT growth 1Y62.67%
EBIT growth 3Y-18%
EBIT growth 5Y-5.02%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y36.37%
FCF growth 3Y12.58%
FCF growth 5Y19.08%
OCF growth 1Y37.3%
OCF growth 3Y12.55%
OCF growth 5Y18.16%