STEWART INFORMATION SERVICES (STC) Stock Fundamental Analysis
NYSE:STC - New York Stock Exchange, Inc. - US8603721015 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to STC. STC was compared to 143 industry peers in the Insurance industry. Both the profitability and financial health of STC have multiple concerns. STC is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! Finally STC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year STC was profitable.
STC had a positive operating cash flow in the past year.
Each year in the past 5 years STC has been profitable.
In the past 5 years STC always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.71%, STC is in the better half of the industry, outperforming 62.94% of the companies in the same industry.
STC has a Return On Equity of 5.23%. This is in the lower half of the industry: STC underperforms 72.03% of its industry peers.
STC has a Return On Invested Capital of 3.95%. This is in the better half of the industry: STC outperforms 76.92% of its industry peers.
STC had an Average Return On Invested Capital over the past 3 years of 4.80%. This is in line with the industry average of 3.97%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.71% | ||
| ROE | 5.23% | ||
| ROIC | 3.95% |
ROA(3y)3.25%
ROA(5y)5.81%
ROE(3y)6.45%
ROE(5y)12%
ROIC(3y)4.8%
ROIC(5y)7.75%
1.3 Margins
STC has a Profit Margin of 2.87%. This is in the lower half of the industry: STC underperforms 72.73% of its industry peers.
In the last couple of years the Profit Margin of STC has declined.
STC's Operating Margin of 4.88% is on the low side compared to the rest of the industry. STC is outperformed by 74.13% of its industry peers.
In the last couple of years the Operating Margin of STC has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.88% | ||
| PM (TTM) | 2.87% | ||
| GM | N/A |
OM growth 3Y-28.36%
OM growth 5Y-4.83%
PM growth 3Y-32.98%
PM growth 5Y-6.19%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), STC is destroying value.
STC has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, STC has more shares outstanding
Compared to 1 year ago, STC has an improved debt to assets ratio.
2.2 Solvency
STC has a debt to FCF ratio of 4.81. This is a neutral value as STC would need 4.81 years to pay back of all of its debts.
STC's Debt to FCF ratio of 4.81 is on the low side compared to the rest of the industry. STC is outperformed by 61.54% of its industry peers.
STC has a Debt/Equity ratio of 0.32. This is a healthy value indicating a solid balance between debt and equity.
STC has a Debt to Equity ratio (0.32) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 4.81 | ||
| Altman-Z | N/A |
ROIC/WACC0.51
WACC7.81%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
STC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 52.76%, which is quite impressive.
Measured over the past years, STC shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.13% on average per year.
The Revenue has grown by 13.97% in the past year. This is quite good.
STC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.12% yearly.
EPS 1Y (TTM)52.76%
EPS 3Y-32.99%
EPS 5Y8.13%
EPS Q2Q%47.25%
Revenue 1Y (TTM)13.97%
Revenue growth 3Y-9.01%
Revenue growth 5Y5.12%
Sales Q2Q%19.81%
3.2 Future
The Earnings Per Share is expected to grow by 27.46% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 10.79% on average over the next years. This is quite good.
EPS Next Y29.47%
EPS Next 2Y33.48%
EPS Next 3Y27.46%
EPS Next 5YN/A
Revenue Next Year13.39%
Revenue Next 2Y12.9%
Revenue Next 3Y10.79%
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 accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 18.07, STC is valued on the expensive side.
STC's Price/Earnings ratio is a bit more expensive when compared to the industry. STC is more expensive than 64.34% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.73, STC is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 11.67, the valuation of STC can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of STC is on the same level as its industry peers.
STC is valuated cheaply when we compare the Price/Forward Earnings ratio to 34.61, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.07 | ||
| Fwd PE | 11.67 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as STC.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of STC indicates a slightly more expensive valuation: STC is more expensive than 64.34% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.13 | ||
| EV/EBITDA | 12.14 |
4.3 Compensation for Growth
STC's 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 STC's earnings are expected to grow with 27.46% in the coming years.
PEG (NY)0.61
PEG (5Y)2.22
EPS Next 2Y33.48%
EPS Next 3Y27.46%
5. Dividend
5.1 Amount
STC has a Yearly Dividend Yield of 2.95%.
STC's Dividend Yield is a higher than the industry average which is at 3.48.
Compared to an average S&P500 Dividend Yield of 2.39, STC pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
5.2 History
On average, the dividend of STC grows each year by 10.37%, which is quite nice.
STC has been paying a dividend for at least 10 years, so it has a reliable track record.
STC has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)10.37%
Div Incr Years4
Div Non Decr Years15
5.3 Sustainability
STC pays out 74.79% of its income as dividend. This is not a sustainable payout ratio.
The dividend of STC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP74.79%
EPS Next 2Y33.48%
EPS Next 3Y27.46%
70.1
+2.16 (+3.18%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners103.48%
Inst Owner Change-1.34%
Ins Owners1.73%
Ins Owner Change3.85%
Market Cap1.96B
Analysts46.67
Price Target74.46 (6.22%)
Short Float %1.93%
Short Ratio2.51
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.95% |
Yearly Dividend1.96
Dividend Growth(5Y)10.37%
DP74.79%
Div Incr Years4
Div Non Decr Years15
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-3.04%
Min EPS beat(2)-25.74%
Max EPS beat(2)19.67%
EPS beat(4)2
Avg EPS beat(4)-3.74%
Min EPS beat(4)-25.74%
Max EPS beat(4)19.67%
EPS beat(8)5
Avg EPS beat(8)30.85%
EPS beat(12)6
Avg EPS beat(12)12.57%
EPS beat(16)10
Avg EPS beat(16)21.81%
Revenue beat(2)2
Avg Revenue beat(2)1.93%
Min Revenue beat(2)1.75%
Max Revenue beat(2)2.12%
Revenue beat(4)3
Avg Revenue beat(4)1.5%
Min Revenue beat(4)-0.78%
Max Revenue beat(4)2.89%
Revenue beat(8)6
Avg Revenue beat(8)0.58%
Revenue beat(12)8
Avg Revenue beat(12)1.3%
Revenue beat(16)12
Avg Revenue beat(16)6.15%
PT rev (1m)-2.67%
PT rev (3m)-7.01%
EPS NQ rev (1m)-3.66%
EPS NQ rev (3m)-7.42%
EPS NY rev (1m)0%
EPS NY rev (3m)-9.24%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.34%
Revenue NY rev (1m)2.99%
Revenue NY rev (3m)1.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.07 | ||
| Fwd PE | 11.67 | ||
| P/S | 0.77 | ||
| P/FCF | 21.13 | ||
| P/OCF | 14.48 | ||
| P/B | 1.4 | ||
| P/tB | 13.74 | ||
| EV/EBITDA | 12.14 |
EPS(TTM)3.88
EY5.53%
EPS(NY)6
Fwd EY8.57%
FCF(TTM)3.32
FCFY4.73%
OCF(TTM)4.84
OCFY6.91%
SpS91.22
BVpS50.12
TBVpS5.1
PEG (NY)0.61
PEG (5Y)2.22
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.71% | ||
| ROE | 5.23% | ||
| ROCE | 5.19% | ||
| ROIC | 3.95% | ||
| ROICexc | 4.21% | ||
| ROICexgc | 12.54% | ||
| OM | 4.88% | ||
| PM (TTM) | 2.87% | ||
| GM | N/A | ||
| FCFM | 3.64% |
ROA(3y)3.25%
ROA(5y)5.81%
ROE(3y)6.45%
ROE(5y)12%
ROIC(3y)4.8%
ROIC(5y)7.75%
ROICexc(3y)5.33%
ROICexc(5y)9.53%
ROICexgc(3y)15.9%
ROICexgc(5y)26.2%
ROCE(3y)6.32%
ROCE(5y)10.19%
ROICexcg growth 3Y-38.74%
ROICexcg growth 5Y-1.59%
ROICexc growth 3Y-37.84%
ROICexc growth 5Y-14.03%
OM growth 3Y-28.36%
OM growth 5Y-4.83%
PM growth 3Y-32.98%
PM growth 5Y-6.19%
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.32 | ||
| Debt/FCF | 4.81 | ||
| Debt/EBITDA | 2.4 | ||
| Cap/Depr | 69.15% | ||
| Cap/Sales | 1.67% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 72.78% | ||
| Profit Quality | 126.55% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score8
WACC7.81%
ROIC/WACC0.51
Cap/Depr(3y)70.02%
Cap/Depr(5y)79.51%
Cap/Sales(3y)1.62%
Cap/Sales(5y)1.34%
Profit Quality(3y)122.37%
Profit Quality(5y)128.78%
High Growth Momentum
Growth
EPS 1Y (TTM)52.76%
EPS 3Y-32.99%
EPS 5Y8.13%
EPS Q2Q%47.25%
EPS Next Y29.47%
EPS Next 2Y33.48%
EPS Next 3Y27.46%
EPS Next 5YN/A
Revenue 1Y (TTM)13.97%
Revenue growth 3Y-9.01%
Revenue growth 5Y5.12%
Sales Q2Q%19.81%
Revenue Next Year13.39%
Revenue Next 2Y12.9%
Revenue Next 3Y10.79%
Revenue Next 5YN/A
EBIT growth 1Y36.77%
EBIT growth 3Y-34.82%
EBIT growth 5Y0.05%
EBIT Next Year78.68%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y51.06%
FCF growth 3Y-35.25%
FCF growth 5Y-8.62%
OCF growth 1Y27.71%
OCF growth 3Y-29.7%
OCF growth 5Y-4.01%