LSE:DLG

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Direct Line Insurance Group

Executive Summary

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

Rewards

Trading at 42.5% below our estimate of its fair value

Earnings are forecast to grow 2.64% per year

Risk Analysis

No risks detected for DLG from our risk checks.


Snowflake Analysis

Undervalued with excellent balance sheet.


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 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

8.2%

DLG

16.2%

GB Insurance

5.5%

GB Market


1 Year Return

-12.7%

DLG

-18.7%

GB Insurance

-9.2%

GB Market

Return vs Industry: DLG exceeded the UK Insurance industry which returned -21.6% over the past year.

Return vs Market: DLG underperformed the UK Market which returned -10% over the past year.


Shareholder returns

DLGIndustryMarket
7 Day8.2%16.2%5.5%
30 Day0.8%14.9%10.8%
90 Day-8.4%-1.9%-0.4%
1 Year-10.6%-12.7%-10.4%-18.7%-4.8%-9.2%
3 Year-1.1%-19.1%-10.6%-26.1%-0.8%-12.9%
5 Year15.6%-23.5%8.6%-19.0%18.1%-8.2%

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?

43.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DLG (£2.89) is trading below our estimate of fair value (£5.03)

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 (9.8x) compared to the Insurance industry average (11.5x).

PE vs Market: DLG is good value based on its PE Ratio (9.8x) compared to the UK market (15x).


Price to Earnings Growth Ratio

PEG Ratio: DLG is poor value based on its PEG Ratio (3.7x)


Price to Book Ratio

PB vs Industry: DLG is good value based on its PB Ratio (1.3x) compared to the GB Insurance industry average (1.4x).


Next Steps

Future Growth

How is Direct Line Insurance Group forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

2.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DLG's forecast earnings growth (2.6% per year) is above the savings rate (1.2%).

Earnings vs Market: DLG's earnings (2.6% per year) are forecast to grow slower than the UK market (21.2% per year).

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

Revenue vs Market: DLG's revenue is expected to decline over the next 3 years (-0.7% per year).

High Growth Revenue: DLG's revenue is forecast to decline over the next 3 years (-0.7% 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 (18.4%).


Next Steps

Past Performance

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

2.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DLG has high quality earnings.

Growing Profit Margin: DLG's current net profit margins (12.2%) are lower than last year (13.3%).


Past Earnings Growth Analysis

Earnings Trend: DLG's earnings have grown by 2.8% 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 (-11.4%) over the past year, making it difficult to compare to the Insurance industry average (4.2%).


Return on Equity

High ROE: DLG's Return on Equity (14%) is considered low.


Next Steps

Financial Health

How is Direct Line Insurance Group's financial position?


Financial Position Analysis

Short Term Liabilities: DLG's short term assets (£3.3B) do not cover its short term liabilities (£5.9B).

Long Term Liabilities: DLG's short term assets (£3.3B) exceed its long term liabilities (£565.8M).


Debt to Equity History and Analysis

Debt Level: DLG's debt to equity ratio (11.1%) is considered satisfactory.

Reducing Debt: DLG's debt to equity ratio has reduced from 21.4% to 11.1% over the past 5 years.

Debt Coverage: DLG's debt is well covered by operating cash flow (139.4%).

Interest Coverage: DLG's interest payments on its debt are well covered by EBIT (21.3x coverage).


Balance Sheet


Next Steps

Dividend

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

8.41%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate DLG's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate DLG's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if DLG's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if DLG's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: DLG is not paying a notable dividend for the UK market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of DLG's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

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

1.1yrs

Average management tenure


CEO

Penny James (50yo)

1.08yrs

Tenure

UK£1,902,000

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's total compensation ($USD2.39M) is about average for companies of similar size in the UK market ($USD3.36M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Penelope James
CEO & Executive Director1.08yrsUK£1.90m0.046% £1.8m
Timothy Harris
CFO & Executive Director0.67yrUK£927.00kno data
Steven Maddock
Chief Operating Officer4yrsno data0.014% £527.6k
Paul Smith
Investor Relations Directorno datano datano data
Humphrey Tomlinson
General Counsel9.42yrsno data0.0080% £310.4k
Mark Evans
Managing Director of Marketing & Digital0.92yrno datano data
Victoria Wallis
Chief People Officer0.17yrno datano data
Neil Manser
Chief Strategy Officer0.25yrno datano data
Jonathan Greenwood
Managing Director of Commercial11.42yrsno data0.011% £418.0k
José Vazquez
Chief Risk Officer8.25yrsno data0.012% £454.5k

1.1yrs

Average Tenure

50.5yo

Average Age

Experienced Management: DLG's management team is not considered experienced ( 1.1 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Penelope James
CEO & Executive Director1.08yrsUK£1.90m0.046% £1.8m
Timothy Harris
CFO & Executive Director0.67yrUK£927.00kno data
Sebastian James
Independent Non-Executive Director5.83yrsUK£95.00k0.00037% £14.4k
Danuta Gray
Independent Non-Executive Director3.33yrsUK£117.00k0.00074% £28.7k
Michael Biggs
Chairman of the Board8.17yrsUK£405.00kno data
Richard Ward
Senior Independent Non-Executive Director4.42yrsUK£120.10kno data
Fiona McBain
Independent Non-Executive Director1.75yrsUK£99.00kno data
Mark Gregory
Independent Non-Executive Director2.25yrsUK£101.10kno data
Jane Hanson
Independent Non-Executive Director8.5yrsUK£131.00k0.00082% £31.9k
Gregor Stewart
Independent Non-Executive Director2.25yrsUK£134.00k0.00022% £8.5k

3.0yrs

Average Tenure

55.5yo

Average Age

Experienced Board: DLG's board of directors are not considered experienced ( 3 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold 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£3.885b
  • Shares outstanding: 1.36b
  • 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 company offers personal motor, home, and rescue insurance products, as well as other personal line insurance products, including travel, pet, and creditor products; and commercial insurance for small and medium-sized enterprises. It also provides management, motor vehicle repair, insurance intermediary, support and operational, legal, and breakdown recovery services. The company sells its insurance products directly through price comparison Websites and phone, as well as through partners and brokers under the Direct Line, Churchill, Green Flag, Direct Line for Business, NIG, DLG Partnerships, Privilege, Shotgun, and DLG Auto Services brands. The company was formerly known as RBS Insurance Group Limited and changed its name to Direct Line Insurance Group plc in February 2012. Direct Line Insurance Group plc was founded in 1985 and is headquartered in Bromley, the United Kingdom. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/05 23:15
End of Day Share Price2020/06/05 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.