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Direct Line Insurance Group

Market Cap

UK£4.1b

Last Updated

2021/04/10 19:08 UTC

Data Sources

Company Financials +

Executive Summary

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


Snowflake Analysis

Excellent balance sheet, good value and pays a dividend.


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

Stable Share Price: DLG is less volatile than 75% of UK stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: DLG's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

-3.5%

DLG

1.1%

GB Insurance

2.7%

GB Market


1 Year Return

8.2%

DLG

38.5%

GB Insurance

24.4%

GB Market

Return vs Industry: DLG underperformed the UK Insurance industry which returned 38.5% over the past year.

Return vs Market: DLG underperformed the UK Market which returned 24.4% over the past year.


Shareholder returns

DLGIndustryMarket
7 Day-3.5%1.1%2.7%
30 Day-3.8%2.6%3.9%
90 Day-9.9%6.3%2.4%
1 Year21.1%8.2%44.6%38.5%30.3%24.4%
3 Year5.0%-15.8%7.9%-10.7%15.2%1.5%
5 Year22.4%-16.5%41.6%5.7%42.8%15.7%

Long-Term 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?

46.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DLG (£3.03) is trading below our estimate of fair value (£5.65)

Significantly Below Fair Value: DLG is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: DLG is good value based on its PE Ratio (11.7x) compared to the GB Insurance industry average (15.2x).

PE vs Market: DLG is good value based on its PE Ratio (11.7x) compared to the UK market (25.6x).


Price to Earnings Growth Ratio

PEG Ratio: DLG is poor value based on its PEG Ratio (1.7x)


Price to Book Ratio

PB vs Industry: DLG's PB Ratio (1.3x) is in line with the GB Insurance industry average.


Future Growth

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

6.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DLG's forecast earnings growth (6.7% per year) is above the savings rate (1%).

Earnings vs Market: DLG's earnings (6.7% per year) are forecast to grow slower than the UK market (20.9% per year).

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

Revenue vs Market: DLG's revenue (2% per year) is forecast to grow slower than the UK market (6.4% per year).

High Growth Revenue: DLG's revenue (2% 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 (19.7%).


Past Performance

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

2.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DLG has high quality earnings.

Growing Profit Margin: DLG's current net profit margins (10.9%) are lower than last year (12.2%).


Past Earnings Growth Analysis

Earnings Trend: DLG's earnings have grown by 2.3% per year over the past 5 years.

Accelerating Growth: DLG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DLG had negative earnings growth (-13%) over the past year, making it difficult to compare to the Insurance industry average (-13%).


Return on Equity

High ROE: DLG's Return on Equity (12.1%) is considered low.


Financial Health

How is Direct Line Insurance Group's financial position?


Financial Position Analysis

Short Term Liabilities: DLG's short term assets (£3.4B) do not cover its short term liabilities (£5.7B).

Long Term Liabilities: DLG's short term assets (£3.4B) exceed its long term liabilities (£869.1M).


Debt to Equity History and Analysis

Debt Level: DLG's debt to equity ratio (20.1%) is considered satisfactory.

Reducing Debt: DLG's debt to equity ratio has reduced from 22.3% to 20.1% over the past 5 years.

Debt Coverage: DLG's debt is well covered by operating cash flow (95.3%).

Interest Coverage: DLG's interest payments on its debt are well covered by EBIT (16.5x coverage).


Balance Sheet


Dividend

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

7.29%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: DLG's dividend (7.29%) is higher than the bottom 25% of dividend payers in the UK market (1.39%).

High Dividend: DLG's dividend (7.29%) is in the top 25% of dividend payers in the UK market (4.24%)


Stability and Growth of Payments

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 8 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (85.5%), DLG's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DLG's dividends in 3 years are forecast to be covered by earnings (84.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.9yrs

Average management tenure


CEO

Penny James (51 yo)

1.92yrs

Tenure

UK£3,188,000

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. Ms. Jame...


CEO Compensation Analysis

Compensation vs Market: Penny's total compensation ($USD4.37M) is above average for companies of similar size in the UK market ($USD2.24M).

Compensation vs Earnings: Penny's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: DLG's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.


Board Members

Experienced Board: DLG's board of directors are considered experienced (3.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: DLG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

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£4.083b
  • Shares outstanding: 1.35b
  • 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


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 Analysis2021/04/10 19:08
End of Day Share Price2021/04/09 00:00
Earnings2020/12/31
Annual Earnings2020/12/31


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.