Evaluating Safety Insurance Group (SAFT) Valuation After Strong Q3 Results and Renewed Shareholder Rewards

Safety Insurance Group (SAFT) just posted stronger operational results for Q3 2025, highlighted by an improved combined ratio and higher net income. The insurer also upheld its 23-year dividend streak and is restarting share buybacks. This underscores management’s focus on rewarding shareholders.

See our latest analysis for Safety Insurance Group.

Even with better operational performance and a renewed focus on shareholder returns, Safety Insurance Group’s share price has struggled this year, dropping 17.3% year to date. However, looking back over five years, the total shareholder return remains a healthy 16%, which hints at resilience and longer-term value despite recent weakness.

If you’re interested in broadening your search beyond insurers, now is a great time to discover fast growing stocks with high insider ownership.

With profitability on the rise and shareholder rewards in focus, investors are left to ask whether Safety Insurance Group is trading at an attractive valuation today or if the market is already factoring in the company’s future growth.

Price-to-Earnings of 12x: Is it justified?

Safety Insurance Group currently trades at a price-to-earnings ratio of 12x, placing it above peer averages but below the broader US market. The last close was $68.23, suggesting investors are paying a premium relative to industry peers.

The price-to-earnings ratio shows how much the market is willing to pay for each dollar of current earnings. For insurers, this multiple can reflect both near-term profit expectations and the market’s perception of business quality or risks.

At 12x earnings, Safety Insurance Group appears expensive when compared to similar companies, which average 9x. However, its ratio remains below the overall US market’s 18.2x price-to-earnings, indicating modest market confidence tempered by sector realities.

When compared to the US insurance industry average of 13.4x, Safety Insurance Group is trading at a slight discount. Still, the premium to peers highlights market caution. A fair ratio benchmark, if available, would provide insight into how much higher or lower this metric could move based on fundamentals.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Earnings of 12x (OVERVALUED)

However, persistent share price declines and limited recent returns could signal underlying market concerns that could challenge the bullish narrative for Safety Insurance Group.

Find out about the key risks to this Safety Insurance Group narrative.

Another View: Discounted Cash Flow Perspective

Taking a different approach, our SWS DCF model estimates Safety Insurance Group’s fair value at $48.03 per share. In comparison, the market price stands at $68.23. This points to the shares trading above their intrinsic value and suggests the stock may be overvalued from a cash flow perspective. Does this challenge the case for buying at today’s levels?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Safety Insurance Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 840 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Safety Insurance Group Narrative

Keep in mind, if you see things differently or want to run your own analysis, it is quick and easy to create a personal view in just minutes. Do it your way

A great starting point for your Safety Insurance Group research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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