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 144 industry peers in the Insurance industry. SIGI has a bad profitability rating. Also its financial health evaluation is rather negative. SIGI has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year SIGI was profitable.
SIGI had a positive operating cash flow in the past year.
In the past 5 years SIGI has always been profitable.
SIGI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a Return On Assets value of 1.46%, SIGI perfoms like the industry average, outperforming 44.37% of the companies in the same industry.
SIGI has a worse Return On Equity (6.34%) than 66.90% of its industry peers.
With a Return On Invested Capital value of 1.73%, SIGI perfoms like the industry average, outperforming 46.48% of the companies in the same industry.
SIGI had an Average Return On Invested Capital over the past 3 years of 2.53%. This is in line with the industry average of 4.52%.
| 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
Looking at the Profit Margin, with a value of 4.07%, SIGI is doing worse than 61.97% of the companies in the same industry.
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 63.38% 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), SIGI is destroying value.
The number of shares outstanding for SIGI has been increased compared to 1 year ago.
Compared to 5 years ago, SIGI has more shares outstanding
Compared to 1 year ago, SIGI has an improved debt to assets ratio.
2.2 Solvency
SIGI has a debt to FCF ratio of 0.48. This is a very positive value and a sign of high solvency as it would only need 0.48 years to pay back of all of its debts.
SIGI has a better Debt to FCF ratio (0.48) than 82.39% 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.
SIGI has a better Debt to Equity ratio (0.16) than 73.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.16 | ||
| Debt/FCF | 0.48 | ||
| Altman-Z | N/A |
ROIC/WACC0.2
WACC8.54%
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 -44.73% in the last year.
The Earnings Per Share has been decreasing by -5.88% on average over the past years.
The Revenue has grown by 15.12% in the past year. This is quite good.
SIGI shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.27% yearly.
EPS 1Y (TTM)-44.73%
EPS 3Y-19.76%
EPS 5Y-5.88%
EPS Q2Q%-16.49%
Revenue 1Y (TTM)15.12%
Revenue growth 3Y13.01%
Revenue growth 5Y11.27%
Sales Q2Q%9.89%
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 40.73% on average per year.
The Revenue is expected to grow by 8.52% on average over the next years. This is quite good.
EPS Next Y133.87%
EPS Next 2Y62.87%
EPS Next 3Y40.73%
EPS Next 5YN/A
Revenue Next Year8.62%
Revenue Next 2Y7.65%
Revenue Next 3Y8.52%
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.
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
The Price/Earnings ratio is 26.83, which means the current valuation is very expensive for SIGI.
Compared to the rest of the industry, the Price/Earnings ratio of SIGI indicates a slightly more expensive valuation: SIGI is more expensive than 73.24% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 29.98. SIGI is around the same levels.
Based on the Price/Forward Earnings ratio of 11.47, the valuation of SIGI can be described as reasonable.
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 22.66. SIGI is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.83 | ||
| Fwd PE | 11.47 |
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 69.01% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.96 | ||
| EV/EBITDA | 17.73 |
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 40.73% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.2
PEG (5Y)N/A
EPS Next 2Y62.87%
EPS Next 3Y40.73%
5. Dividend
5.1 Amount
SIGI has a Yearly Dividend Yield of 1.80%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.06, SIGI has a dividend in line with its industry peers.
SIGI's Dividend Yield is slightly below the S&P500 average, which is at 2.30.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.8% |
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 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 2Y62.87%
EPS Next 3Y40.73%
87.19
+1.14 (+1.33%)
Chartmill FA Rating
GICS SectorFinancials
GICS IndustryGroupInsurance
GICS IndustryInsurance
Earnings (Last)
Earnings (Next)
Inst Owners85.34%
Inst Owner Change1.59%
Ins Owners0.8%
Ins Owner Change3.3%
Market Cap5.30B
Analysts74.67
Price Target96.46 (10.63%)
Short Float %2.34%
Short Ratio3.83
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.8% |
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)-7.93%
PT rev (3m)-6.67%
EPS NQ rev (1m)-3%
EPS NQ rev (3m)-4.22%
EPS NY rev (1m)-4.64%
EPS NY rev (3m)-4.26%
Revenue NQ rev (1m)0.7%
Revenue NQ rev (3m)0.7%
Revenue NY rev (1m)0.49%
Revenue NY rev (3m)1.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.83 | ||
| Fwd PE | 11.47 | ||
| P/S | 1.09 | ||
| P/FCF | 4.96 | ||
| P/OCF | 4.82 | ||
| P/B | 1.7 | ||
| P/tB | 1.7 | ||
| EV/EBITDA | 17.73 |
EPS(TTM)3.25
EY3.73%
EPS(NY)7.6
Fwd EY8.72%
FCF(TTM)17.58
FCFY20.16%
OCF(TTM)18.09
OCFY20.74%
SpS79.96
BVpS51.31
TBVpS51.18
PEG (NY)0.2
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
WACC8.54%
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)-44.73%
EPS 3Y-19.76%
EPS 5Y-5.88%
EPS Q2Q%-16.49%
EPS Next Y133.87%
EPS Next 2Y62.87%
EPS Next 3Y40.73%
EPS Next 5YN/A
Revenue 1Y (TTM)15.12%
Revenue growth 3Y13.01%
Revenue growth 5Y11.27%
Sales Q2Q%9.89%
Revenue Next Year8.62%
Revenue Next 2Y7.65%
Revenue Next 3Y8.52%
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%