HCI GROUP INC (HCI) Stock Fundamental Analysis
NYSE:HCI - New York Stock Exchange, Inc. - US40416E1038 - Common Stock - Currency: USD
We assign a fundamental rating of 7 out of 10 to HCI. HCI was compared to 143 industry peers in the Insurance industry. While HCI belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. An interesting combination arises when we look at growth and value: HCI is growing strongly while it also seems undervalued. With these ratings, HCI could be worth investigating further for value and growth investing!.
1. Profitability
1.1 Basic Checks
In the past year HCI was profitable.
HCI had a positive operating cash flow in the past year.
HCI had positive earnings in 4 of the past 5 years.
HCI had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 6.83%, HCI belongs to the best of the industry, outperforming 92.31% of the companies in the same industry.
The Return On Equity of HCI (33.59%) is better than 95.80% of its industry peers.
HCI has a Return On Invested Capital of 8.95%. This is amongst the best in the industry. HCI outperforms 93.01% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.83% | ||
| ROE | 33.59% | ||
| ROIC | 8.95% |
ROA(3y)1.97%
ROA(5y)1.77%
ROE(3y)4.34%
ROE(5y)5.31%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
The Profit Margin of HCI (20.30%) is better than 89.51% of its industry peers.
In the last couple of years the Profit Margin of HCI has grown nicely.
HCI has a better Operating Margin (34.94%) than 94.41% of its industry peers.
HCI's Operating Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 34.94% | ||
| PM (TTM) | 20.3% | ||
| GM | N/A |
OM growth 3Y83.48%
OM growth 5Y3.9%
PM growth 3Y215.92%
PM growth 5Y6.5%
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
HCI has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for HCI has been increased compared to 1 year ago.
HCI has more shares outstanding than it did 5 years ago.
HCI has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.41, we must say that HCI is in the distress zone and has some risk of bankruptcy.
HCI has a Altman-Z score of 1.41. This is amongst the best in the industry. HCI outperforms 83.22% of its industry peers.
The Debt to FCF ratio of HCI is 0.70, which is an excellent value as it means it would take HCI, only 0.70 years of fcf income to pay off all of its debts.
HCI's Debt to FCF ratio of 0.70 is fine compared to the rest of the industry. HCI outperforms 72.03% of its industry peers.
HCI has a Debt/Equity ratio of 0.51. This is a neutral value indicating HCI is somewhat dependend on debt financing.
HCI's Debt to Equity ratio of 0.51 is on the low side compared to the rest of the industry. HCI is outperformed by 65.73% of its industry peers.
Although HCI does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 0.7 | ||
| Altman-Z | 1.41 |
ROIC/WACC1.06
WACC8.46%
2.3 Liquidity
HCI has a Current Ratio of 0.07. This is a bad value and indicates that HCI is not financially healthy enough and could expect problems in meeting its short term obligations.
With a decent Current ratio value of 0.07, HCI is doing good in the industry, outperforming 64.34% of the companies in the same industry.
A Quick Ratio of 0.07 indicates that HCI may have some problems paying its short term obligations.
HCI has a better Quick ratio (0.07) than 64.34% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.07 | ||
| Quick Ratio | 0.07 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 17.55% over the past year.
The Earnings Per Share has been growing by 22.91% on average over the past years. This is a very strong growth
Looking at the last year, HCI shows a very strong growth in Revenue. The Revenue has grown by 36.21%.
Measured over the past years, HCI shows a very strong growth in Revenue. The Revenue has been growing by 25.22% on average per year.
EPS 1Y (TTM)17.55%
EPS 3Y342.08%
EPS 5Y22.91%
EPS Q2Q%-90.37%
Revenue 1Y (TTM)36.21%
Revenue growth 3Y22.37%
Revenue growth 5Y25.22%
Sales Q2Q%-0.49%
3.2 Future
HCI is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 20.02% yearly.
Based on estimates for the next years, HCI will show a quite strong growth in Revenue. The Revenue will grow by 9.11% on average per year.
EPS Next Y76.13%
EPS Next 2Y28.98%
EPS Next 3Y27.19%
EPS Next 5Y20.02%
Revenue Next Year16.58%
Revenue Next 2Y9.11%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same 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
HCI is valuated correctly with a Price/Earnings ratio of 16.47.
Based on the Price/Earnings ratio, HCI is valued a bit more expensive than 60.14% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.64, HCI is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 9.35, the valuation of HCI can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HCI indicates a somewhat cheap valuation: HCI is cheaper than 64.34% of the companies listed in the same industry.
HCI is valuated cheaply when we compare the Price/Forward Earnings ratio to 21.44, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.47 | ||
| Fwd PE | 9.35 |
4.2 Price Multiples
HCI's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. HCI is cheaper than 80.42% of the companies in the same industry.
71.33% of the companies in the same industry are more expensive than HCI, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.68 | ||
| EV/EBITDA | 4.55 |
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.
The decent profitability rating of HCI may justify a higher PE ratio.
HCI's earnings are expected to grow with 27.19% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.22
PEG (5Y)0.72
EPS Next 2Y28.98%
EPS Next 3Y27.19%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.10%, HCI has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.28, HCI is paying slightly less dividend.
With a Dividend Yield of 1.10, HCI pays less dividend than the S&P500 average, which is at 2.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.1% |
5.2 History
The dividend of HCI has a limited annual growth rate of 0.17%.
HCI has paid a dividend for at least 10 years, which is a reliable track record.
HCI has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)0.17%
Div Incr Years0
Div Non Decr Years14
5.3 Sustainability
HCI pays out 10.90% of its income as dividend. This is a sustainable payout ratio.
HCI's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP10.9%
EPS Next 2Y28.98%
EPS Next 3Y27.19%
142.33
-2.32 (-1.6%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners90.68%
Inst Owner Change0.66%
Ins Owners17.54%
Ins Owner Change0%
Market Cap1.53B
Analysts80
Price Target161.42 (13.41%)
Short Float %15.9%
Short Ratio12.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.1% |
Yearly Dividend1.62
Dividend Growth(5Y)0.17%
DP10.9%
Div Incr Years0
Div Non Decr Years14
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)92.67%
Min EPS beat(2)73.42%
Max EPS beat(2)111.92%
EPS beat(4)4
Avg EPS beat(4)58.49%
Min EPS beat(4)19.69%
Max EPS beat(4)111.92%
EPS beat(8)8
Avg EPS beat(8)319.78%
EPS beat(12)11
Avg EPS beat(12)200.58%
EPS beat(16)13
Avg EPS beat(16)108.14%
Revenue beat(2)0
Avg Revenue beat(2)-5.53%
Min Revenue beat(2)-8.88%
Max Revenue beat(2)-2.17%
Revenue beat(4)2
Avg Revenue beat(4)-0.16%
Min Revenue beat(4)-8.88%
Max Revenue beat(4)6.92%
Revenue beat(8)6
Avg Revenue beat(8)2.91%
Revenue beat(12)8
Avg Revenue beat(12)9.44%
Revenue beat(16)12
Avg Revenue beat(16)15.38%
PT rev (1m)3.6%
PT rev (3m)12.83%
EPS NQ rev (1m)0.21%
EPS NQ rev (3m)34.85%
EPS NY rev (1m)13.65%
EPS NY rev (3m)16.73%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.89%
Revenue NY rev (1m)0.2%
Revenue NY rev (3m)2.24%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.47 | ||
| Fwd PE | 9.35 | ||
| P/S | 2.04 | ||
| P/FCF | 4.68 | ||
| P/OCF | 4.62 | ||
| P/B | 3.38 | ||
| P/tB | 3.42 | ||
| EV/EBITDA | 4.55 |
EPS(TTM)8.64
EY6.07%
EPS(NY)15.22
Fwd EY10.69%
FCF(TTM)30.43
FCFY21.38%
OCF(TTM)30.81
OCFY21.65%
SpS69.64
BVpS42.09
TBVpS41.61
PEG (NY)0.22
PEG (5Y)0.72
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.83% | ||
| ROE | 33.59% | ||
| ROCE | 12.23% | ||
| ROIC | 8.95% | ||
| ROICexc | 11.83% | ||
| ROICexgc | 19.8% | ||
| OM | 34.94% | ||
| PM (TTM) | 20.3% | ||
| GM | N/A | ||
| FCFM | 43.7% |
ROA(3y)1.97%
ROA(5y)1.77%
ROE(3y)4.34%
ROE(5y)5.31%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3Y65.67%
ROICexcg growth 5Y7.68%
ROICexc growth 3Y52.3%
ROICexc growth 5Y4.65%
OM growth 3Y83.48%
OM growth 5Y3.9%
PM growth 3Y215.92%
PM growth 5Y6.5%
GM growth 3YN/A
GM growth 5YN/A
F-Score8
Asset Turnover0.34
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 0.7 | ||
| Debt/EBITDA | 0.86 | ||
| Cap/Depr | 94.25% | ||
| Cap/Sales | 0.54% | ||
| Interest Coverage | 20.69 | ||
| Cash Conversion | 124.57% | ||
| Profit Quality | 215.26% | ||
| Current Ratio | 0.07 | ||
| Quick Ratio | 0.07 | ||
| Altman-Z | 1.41 |
F-Score8
WACC8.46%
ROIC/WACC1.06
Cap/Depr(3y)84.29%
Cap/Depr(5y)77.24%
Cap/Sales(3y)1%
Cap/Sales(5y)1.23%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)17.55%
EPS 3Y342.08%
EPS 5Y22.91%
EPS Q2Q%-90.37%
EPS Next Y76.13%
EPS Next 2Y28.98%
EPS Next 3Y27.19%
EPS Next 5Y20.02%
Revenue 1Y (TTM)36.21%
Revenue growth 3Y22.37%
Revenue growth 5Y25.22%
Sales Q2Q%-0.49%
Revenue Next Year16.58%
Revenue Next 2Y9.11%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y108.1%
EBIT growth 3Y124.51%
EBIT growth 5Y30.1%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y46.22%
FCF growth 3Y52.08%
FCF growth 5Y45.02%
OCF growth 1Y43.86%
OCF growth 3Y50.93%
OCF growth 5Y43.78%