SELECTIVE INSURANCE GROUP (SIGI) Stock Fundamental Analysis
NASDAQ:SIGI - Nasdaq - US8163001071 - Common Stock - Currency: USD
Overall SIGI gets a fundamental rating of 4 out of 10. We evaluated SIGI against 143 industry peers in the Insurance industry. SIGI may be in some trouble as it scores bad on both profitability and health. SIGI is not valued too expensively and it also shows a decent growth rate.
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.
In the past 5 years SIGI has always been profitable.
Each year in the past 5 years SIGI had a positive operating cash flow.
1.2 Ratios
SIGI has a Return On Assets (1.46%) which is in line with its industry peers.
SIGI has a Return On Equity of 6.34%. This is in the lower half of the industry: SIGI underperforms 69.23% of its industry peers.
SIGI has a Return On Invested Capital of 1.73%. This is comparable to the rest of the industry: SIGI outperforms 46.85% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for SIGI is in line with the industry average of 4.47%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.46% | ||
| ROE | 6.34% | ||
| ROIC | 1.73% |
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
With a Profit Margin value of 4.07%, SIGI is not doing good in the industry: 69.23% of the companies in the same industry are doing better.
In the last couple of years the Profit Margin of SIGI has declined.
SIGI's Operating Margin of 5.94% is on the low side compared to the rest of the industry. SIGI is outperformed by 68.53% of its industry peers.
SIGI's Operating Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.94% | ||
| PM (TTM) | 4.07% | ||
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so SIGI is destroying value.
The number of shares outstanding for SIGI has been increased compared to 1 year ago.
SIGI has more shares outstanding than it did 5 years ago.
The debt/assets ratio for SIGI has been reduced compared to a year ago.
2.2 Solvency
The Debt to FCF ratio of SIGI is 0.48, which is an excellent value as it means it would take SIGI, only 0.48 years of fcf income to pay off all of its debts.
SIGI's Debt to FCF ratio of 0.48 is fine compared to the rest of the industry. SIGI outperforms 79.72% of its industry peers.
SIGI has a Debt/Equity ratio of 0.16. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of SIGI (0.16) is better than 73.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.16 | ||
| Debt/FCF | 0.48 | ||
| Altman-Z | N/A |
ROIC/WACC0.2
WACC8.65%
2.3 Liquidity
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | N/A | ||
| Quick Ratio | N/A |
3. Growth
3.1 Past
The earnings per share for SIGI have decreased strongly by -36.22% in the last year.
The Earnings Per Share has been decreasing by -5.88% on average over the past years.
Looking at the last year, SIGI shows a quite strong growth in Revenue. The Revenue has grown by 14.88% in the last year.
The Revenue has been growing by 11.27% on average over the past years. This is quite good.
EPS 1Y (TTM)-36.22%
EPS 3Y-19.76%
EPS 5Y-5.88%
EPS Q2Q%32.33%
Revenue 1Y (TTM)14.88%
Revenue growth 3Y13.01%
Revenue growth 5Y11.27%
Sales Q2Q%11.1%
3.2 Future
SIGI is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 41.41% yearly.
SIGI is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.19% yearly.
EPS Next Y130.37%
EPS Next 2Y62.81%
EPS Next 3Y41.41%
EPS Next 5YN/A
Revenue Next Year8.9%
Revenue Next 2Y8.29%
Revenue Next 3Y9.19%
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 stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 24.26, the valuation of SIGI can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of SIGI indicates a slightly more expensive valuation: SIGI is more expensive than 69.93% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.92, SIGI is valued at the same level.
The Price/Forward Earnings ratio is 10.36, which indicates a very decent valuation of SIGI.
SIGI's Price/Forward Earnings ratio is in line with the industry average.
SIGI's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 21.65.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.26 | ||
| Fwd PE | 10.36 |
4.2 Price Multiples
SIGI's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, SIGI is valued a bit cheaper than the industry average as 70.63% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.07 | ||
| EV/EBITDA | 18.33 |
4.3 Compensation for Growth
SIGI's 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 41.41% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.19
PEG (5Y)N/A
EPS Next 2Y62.81%
EPS Next 3Y41.41%
5. Dividend
5.1 Amount
SIGI has a Yearly Dividend Yield of 1.67%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.28, SIGI has a dividend in line with its industry peers.
Compared to the average S&P500 Dividend Yield of 2.51, SIGI is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.67% |
5.2 History
On average, the dividend of SIGI grows each year by 13.90%, which is quite nice.
SIGI has been paying a dividend for at least 10 years, so it has 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)13.9%
Div Incr Years11
Div Non Decr Years34
5.3 Sustainability
SIGI pays out 47.59% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of SIGI is growing, but earnings are growing more, so the dividend growth is sustainable.
DP47.59%
EPS Next 2Y62.81%
EPS Next 3Y41.41%
89.26
-1.64 (-1.8%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners85.34%
Inst Owner Change0.7%
Ins Owners0.8%
Ins Owner Change2.44%
Market Cap5.42B
Analysts73.33
Price Target95.54 (7.04%)
Short Float %2.14%
Short Ratio2.99
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.67% |
Yearly Dividend1.55
Dividend Growth(5Y)13.9%
DP47.59%
Div Incr Years11
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-18.38%
Min EPS beat(2)-20.05%
Max EPS beat(2)-16.71%
EPS beat(4)0
Avg EPS beat(4)-59.79%
Min EPS beat(4)-172.62%
Max EPS beat(4)-16.71%
EPS beat(8)0
Avg EPS beat(8)-32.62%
EPS beat(12)0
Avg EPS beat(12)-24.42%
EPS beat(16)4
Avg EPS beat(16)-10.35%
Revenue beat(2)0
Avg Revenue beat(2)-2.34%
Min Revenue beat(2)-3.37%
Max Revenue beat(2)-1.3%
Revenue beat(4)1
Avg Revenue beat(4)-0.93%
Min Revenue beat(4)-3.37%
Max Revenue beat(4)1.1%
Revenue beat(8)5
Avg Revenue beat(8)0.52%
Revenue beat(12)6
Avg Revenue beat(12)0.34%
Revenue beat(16)10
Avg Revenue beat(16)2.52%
PT rev (1m)0%
PT rev (3m)-9.07%
EPS NQ rev (1m)-2.12%
EPS NQ rev (3m)-7.21%
EPS NY rev (1m)-1.5%
EPS NY rev (3m)-6.24%
Revenue NQ rev (1m)-0.47%
Revenue NQ rev (3m)0.23%
Revenue NY rev (1m)0.25%
Revenue NY rev (3m)0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.26 | ||
| Fwd PE | 10.36 | ||
| P/S | 1.12 | ||
| P/FCF | 5.07 | ||
| P/OCF | 4.93 | ||
| P/B | 1.74 | ||
| P/tB | 1.74 | ||
| EV/EBITDA | 18.33 |
EPS(TTM)3.68
EY4.12%
EPS(NY)8.62
Fwd EY9.65%
FCF(TTM)17.59
FCFY19.71%
OCF(TTM)18.1
OCFY20.28%
SpS80.01
BVpS51.34
TBVpS51.21
PEG (NY)0.19
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.46% | ||
| ROE | 6.34% | ||
| ROCE | 2.16% | ||
| ROIC | 1.73% | ||
| ROICexc | 1.73% | ||
| ROICexgc | 1.96% | ||
| OM | 5.94% | ||
| PM (TTM) | 4.07% | ||
| GM | N/A | ||
| FCFM | 21.99% |
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-Score6
Asset Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.16 | ||
| Debt/FCF | 0.48 | ||
| Debt/EBITDA | 1.57 | ||
| Cap/Depr | 88.53% | ||
| Cap/Sales | 0.63% | ||
| Interest Coverage | 10.12 | ||
| Cash Conversion | 339.81% | ||
| Profit Quality | 540.45% | ||
| Current Ratio | N/A | ||
| Quick Ratio | N/A | ||
| Altman-Z | N/A |
F-Score6
WACC8.65%
ROIC/WACC0.2
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)-36.22%
EPS 3Y-19.76%
EPS 5Y-5.88%
EPS Q2Q%32.33%
EPS Next Y130.37%
EPS Next 2Y62.81%
EPS Next 3Y41.41%
EPS Next 5YN/A
Revenue 1Y (TTM)14.88%
Revenue growth 3Y13.01%
Revenue growth 5Y11.27%
Sales Q2Q%11.1%
Revenue Next Year8.9%
Revenue Next 2Y8.29%
Revenue Next 3Y9.19%
Revenue Next 5YN/A
EBIT growth 1Y-39.53%
EBIT growth 3Y-18%
EBIT growth 5Y-5.02%
EBIT Next YearN/A
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y45.2%
FCF growth 3Y12.58%
FCF growth 5Y19.08%
OCF growth 1Y44.93%
OCF growth 3Y12.55%
OCF growth 5Y18.16%