LSE:DLG

Stock Analysis Report

Direct Line Insurance Group

Executive Summary

Direct Line Insurance Group plc provides general insurance products and services in the United Kingdom.

Snowflake

Fundamentals

Good value with proven track record.


Similar Companies

Share Price & News

How has Direct Line Insurance Group's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

2.0%

DLG

-0.6%

GB Insurance

0.2%

GB Market


1 Year Return

-11.7%

DLG

-2.3%

GB Insurance

1.7%

GB Market

Return vs Industry: DLG underperformed the UK Insurance industry which returned -2.3% over the past year.

Return vs Market: DLG underperformed the UK Market which returned 1.7% over the past year.


Shareholder returns

DLGIndustryMarket
7 Day2.0%-0.6%0.2%
30 Day-3.7%-0.9%-1.7%
90 Day-13.0%-10.0%-3.1%
1 Year-3.7%-11.7%2.7%-2.3%6.7%1.7%
3 Year3.7%-17.6%16.0%-0.02%17.7%3.1%
5 Year51.1%-3.8%32.4%4.5%36.1%5.5%

Price Volatility Vs. Market

How volatile is Direct Line Insurance Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Direct Line Insurance Group undervalued compared to its fair value and its price relative to the market?

39.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DLG (£2.9) is trading below our estimate of fair value (£4.75)

Significantly Below Fair Value: DLG is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: DLG is good value based on its PE Ratio (9.2x) compared to the Insurance industry average (13.4x).

PE vs Market: DLG is good value based on its PE Ratio (9.2x) compared to the UK market (16.6x).


Price to Earnings Growth Ratio

PEG Ratio: DLG is poor value based on its PEG Ratio (14.8x)


Price to Book Ratio

PB vs Industry: DLG is good value based on its PB Ratio (1.4x) compared to the GB Insurance industry average (1.7x).


Next Steps

  • Explore potentially undervalued companies in the Insurance industry.

Future Growth

How is Direct Line Insurance Group forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

0.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DLG's forecast earnings growth (0.6% per year) is below the savings rate (1.2%).

Earnings vs Market: DLG's earnings (0.6% per year) are forecast to grow slower than the UK market (12.4% per year).

High Growth Earnings: DLG's earnings are forecast to grow, but not significantly.

Revenue vs Market: DLG's revenue (1.7% per year) is forecast to grow slower than the UK market (3.9% per year).

High Growth Revenue: DLG's revenue (1.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DLG's Return on Equity is forecast to be low in 3 years time (17%).


Next Steps

Past Performance

How has Direct Line Insurance Group performed over the past 5 years?

3.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: DLG's earnings have grown by 3.6% per year over the past 5 years.

Accelerating Growth: DLG's earnings growth over the past year (11%) exceeds its 5-year average (3.6% per year).

Earnings vs Industry: DLG earnings growth over the past year (11%) underperformed the Insurance industry 21.9%.


Return on Equity

High ROE: DLG's Return on Equity (15.6%) is considered low.


Return on Assets

ROA vs Industry: DLG has a higher Return on Assets than the Insurance industry average last year.


Return on Capital Employed

ROCE Improving: DLG has improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Direct Line Insurance Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: DLG has a low level of unsold assets or inventory.

Debt Coverage by Assets: DLG's debt is covered by short term assets (assets are 10.508510x debt).


Financial Institutions Analysis

Asset Level: DLG's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if DLG has a sufficient allowance for bad loans.

Low Risk Liabilities: DLG reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if DLG has an acceptable proportion of non-loan assets held.

Low Risk Deposits: DLG has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if DLG has an appropriate level of bad loans.


Next Steps

Dividend

What is Direct Line Insurance Group's current dividend yield, its reliability and sustainability?

10.11%

Current Dividend Yield


Dividend Yield vs Market

company10.1%marketbottom25%2.0%markettop25%5.4%industryaverage5.1%forecastin3Years9.1%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: DLG's dividend (10.11%) is higher than the bottom 25% of dividend payers in the UK market (1.99%).

High Dividend: DLG's dividend (10.11%) is in the top 25% of dividend payers in the UK market (5.37%)

Stable Dividend: DLG has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: DLG's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (67.2%), DLG's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DLG's dividends in 3 years are not forecast to be well covered by earnings (93% payout ratio).


Next Steps

Management

What is the CEO of Direct Line Insurance Group's salary, the management and board of directors tenure and is there insider trading?

5.1yrs

Average management tenure


CEO

Penny James (50yo)

0.4yrs

Tenure

UK£3,920,000

Compensation

Mrs. Penelope Jane James, also known as Penny, ACA, has been the Chief Executive Officer at Direct Line Insurance Group Plc since May 09, 2019 and as its Executive Director since November 1, 2017. She also ...


CEO Compensation Analysis

Compensation vs. Market: Penny has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the UK market.

Compensation vs Earnings: Penny's compensation has increased by more than 20% in the past year.


Management Age and Tenure

5.1yrs

Average Tenure

Experienced Management: DLG's management team is seasoned and experienced (5.1 years average tenure).


Board Age and Tenure

2.7yrs

Average Tenure

56yo

Average Age

Experienced Board: DLG's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: DLG insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

SellUK£101,78502 Aug 19
Jonathan Greenwood
EntityIndividual
Role
Senior Key Executive
Managing Director of Commercial
Shares31,824
Max PriceUK£3.20
BuyUK£101,21502 Aug 19
Jonathan Greenwood
EntityIndividual
Role
Senior Key Executive
Managing Director of Commercial
Shares31,707
Max PriceUK£3.19
SellUK£846,78703 Apr 19
Paul Geddes
EntityIndividual
Shares239,883
Max PriceUK£3.53
SellUK£77,99003 Apr 19
Michael Holliday-Williams
EntityIndividual
Shares22,000
Max PriceUK£3.55

Ownership Breakdown


Management Team

  • Penny James (50yo)

    CEO & Executive Director

    • Tenure: 0.4yrs
    • Compensation: UK£3.92m
  • Andy Broadfield

    Director of Investor Relations & Capital

    • Tenure: 0yrs
  • Steve Maddock

    Chief Operating Officer

    • Tenure: 3.3yrs
  • Simon Linares

    Group Human Resources Director

    • Tenure: 5.1yrs
  • Jon Greenwood (51yo)

    Managing Director of Commercial

    • Tenure: 10.8yrs
  • Humphrey Tomlinson

    General Counsel

    • Tenure: 8.8yrs
  • José Vazquez

    Chief Risk Officer

    • Tenure: 7.6yrs
  • Jennifer Thomas

    Head of Financial Communications

    • Tenure: 0yrs
  • Lisa Tremble

    Head of External Affairs

    • Tenure: 0yrs
  • Mark Evans

    Managing Director of Marketing & Digital

    • Tenure: 0.3yrs

Board Members

  • Sebastian James (53yo)

    Independent Non-Executive Director

    • Tenure: 5.2yrs
    • Compensation: UK£95.00k
  • Danuta Gray (61yo)

    Independent Non-Executive Director

    • Tenure: 2.7yrs
    • Compensation: UK£107.00k
  • Mike Biggs (67yo)

    Chairman of the Board

    • Tenure: 7.5yrs
    • Compensation: UK£406.00k
  • Richard Ward (62yo)

    Senior Independent Non-Executive Director

    • Tenure: 3.8yrs
    • Compensation: UK£120.40k
  • Fiona McBain (58yo)

    Independent Non-Executive Director

    • Tenure: 1.1yrs
    • Compensation: UK£27.00k
  • Penny James (50yo)

    CEO & Executive Director

    • Tenure: 0.4yrs
    • Compensation: UK£3.92m
  • Mark Gregory (56yo)

    Independent Non-Executive Director

    • Tenure: 1.6yrs
    • Compensation: UK£75.00k
  • Jane Hanson (52yo)

    Independent Non-Executive Director

    • Tenure: 7.8yrs
    • Compensation: UK£130.00k
  • Gregor Stewart (55yo)

    Independent Non-Executive Director

    • Tenure: 1.6yrs
    • Compensation: UK£92.00k

Company Information

Direct Line Insurance Group plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Direct Line Insurance Group plc
  • Ticker: DLG
  • Exchange: LSE
  • Founded: 1985
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: UK£3.960b
  • Shares outstanding: 1.37b
  • Website: https://www.directlinegroup.co.uk

Number of Employees


Location

  • Direct Line Insurance Group plc
  • Churchill Court
  • Westmoreland Road
  • Bromley
  • Greater London
  • BR1 1DP
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DLGLSE (London Stock Exchange)YesOrdinary SharesGBGBPOct 2012
DLGLBATS-CHIXE (BATS 'Chi-X Europe')YesOrdinary SharesGBGBPOct 2012
DIIS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDOct 2012
D1LNDB (Deutsche Boerse AG)YesOrdinary SharesDEEUROct 2012
DIIS.YOTCPK (Pink Sheets LLC)ADR NEWUSUSDDec 2012

Biography

Direct Line Insurance Group plc provides general insurance products and services in the United Kingdom. It operates through Motor, Home, Rescue and Other Personal Lines, and Commercial segments. The compan ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/21 21:17
End of Day Share Price2019/10/21 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.