NasdaqGS:SIGI

Stock Analysis Report

Selective Insurance Group

Executive Summary

Selective Insurance Group, Inc., together with its subsidiaries, provides insurance products and services in the United States.

Rewards

Trading at 22.5% below its fair value

Earnings are forecast to grow 2.49% per year

Earnings grew by 44.1% over the past year

Pays a reliable dividend of 1.38%

Risk Analysis

No risks detected for SIGI from our risk checks.


Snowflake Analysis

Solid track record, good value and pays a dividend.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: SIGI has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.0%

SIGI

-0.3%

US Insurance

-0.09%

US Market


1 Year Return

11.1%

SIGI

19.2%

US Insurance

23.9%

US Market

Return vs Industry: SIGI underperformed the US Insurance industry which returned 20.4% over the past year.

Return vs Market: SIGI underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

SIGIIndustryMarket
7 Day-2.0%-0.3%-0.09%
30 Day1.9%1.6%3.1%
90 Day-7.5%5.4%10.4%
1 Year12.4%11.1%22.3%19.2%26.6%23.9%
3 Year63.1%57.1%34.2%23.8%50.9%41.2%
5 Year166.0%147.2%77.1%55.8%78.1%58.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

21.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SIGI ($66.51) is trading below our estimate of fair value ($85.87)

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


Price To Earnings Ratio

PE vs Industry: SIGI is good value based on its PE Ratio (16.8x) compared to the Insurance industry average (17.1x).

PE vs Market: SIGI is good value based on its PE Ratio (16.7x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: SIGI is poor value based on its PEG Ratio (6.7x)


Price to Book Ratio

PB vs Industry: SIGI is overvalued based on its PB Ratio (1.8x) compared to the US Insurance industry average (1.2x).


Next Steps

Future Growth

How is Selective Insurance Group forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

3.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SIGI's forecast earnings growth (2.5% per year) is above the savings rate (1.7%).

Earnings vs Market: SIGI's earnings (2.5% per year) are forecast to grow slower than the US market (14.3% per year).

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

Revenue vs Market: SIGI's revenue (4.5% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: SIGI's revenue (4.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SIGI's Return on Equity is forecast to be low in 3 years time (10.7%).


Next Steps

Past Performance

How has Selective Insurance Group performed over the past 5 years?

7.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SIGI has high quality earnings.

Growing Profit Margin: SIGI's current net profit margins (8.5%) are higher than last year (6.3%).


Past Earnings Growth Analysis

Earnings Trend: SIGI's earnings have grown by 7.1% per year over the past 5 years.

Accelerating Growth: SIGI's earnings growth over the past year (44.1%) exceeds its 5-year average (7.1% per year).

Earnings vs Industry: SIGI earnings growth over the past year (44.1%) exceeded the Insurance industry -11.3%.


Return on Equity

High ROE: SIGI's Return on Equity (11%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Selective 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: SIGI has a low level of unsold assets or inventory.

Debt Coverage by Assets: SIGI's debt is covered by short term assets (assets are 3.6x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

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

1.38%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%1.4%markettop25%3.7%industryaverage2.3%forecastin3Years1.5%

Current dividend yield vs market & industry

Notable Dividend: SIGI's dividend (1.38%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: SIGI's dividend (1.38%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: SIGI's dividends per share have been stable in the past 10 years.

Growing Dividend: SIGI's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (20.1%), SIGI's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SIGI's dividends in 3 years are forecast to be well covered by earnings (23.1% payout ratio).


Next Steps

Management

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

5.5yrs

Average management tenure


CEO

Greg Murphy (63yo)

20.7yrs

Tenure

US$4,946,192

Compensation

Mr. Gregory Edward Murphy, also known as Greg, has been the Chairman and Chief Executive Officer of Selective Insurance Group Inc. and Selective Insurance Company Of America since May 2000. Mr. Murphy has  ...


CEO Compensation Analysis

Compensation vs Market: Greg's total compensation ($USD4.95M) is about average for companies of similar size in the US market ($USD4.99M).

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


Management Age and Tenure

5.5yrs

Average Tenure

57yo

Average Age

Experienced Management: SIGI's management team is seasoned and experienced (5.5 years average tenure).


Board Age and Tenure

11.1yrs

Average Tenure

65yo

Average Age

Experienced Board: SIGI's board of directors are seasoned and experienced ( 11.1 years average tenure).


Insider Trading

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


Recent Insider Transactions

BuyUS$65,00022 Nov 19
Terrence Cavanaugh
EntityIndividual
Shares1,000
Max PriceUS$65.00
SellUS$605,20008 Aug 19
William Rue
EntityIndividual
Role
Member of the Board of Directors
Director
Shares7,795
Max PriceUS$78.09
SellUS$492,47110 May 19
Michael Lanza
EntityIndividual
Role
Chief Compliance Officer
Executive VP
Shares6,946
Max PriceUS$70.90
SellUS$104,39610 May 19
Cynthia Nicholson
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,468
Max PriceUS$71.11
SellUS$694,33907 May 19
Cynthia Nicholson
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares9,786
Max PriceUS$70.95
SellUS$6607 May 19
Michael Morrissey
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares0.94
Max PriceUS$70.71
SellUS$239,49722 Feb 19
John Burville
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,614
Max PriceUS$66.27
SellUS$331,22720 Feb 19
Gregory Murphy
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares5,000
Max PriceUS$66.25
SellUS$662,84820 Feb 19
Paul Bauer
EntityIndividual
Shares10,000
Max PriceUS$66.31

Ownership Breakdown

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


Management Team

  • Greg Murphy (63yo)

    Chairman & CEO

    • Tenure: 20.7yrs
    • Compensation: US$4.95m
  • Michael Lanza (57yo)

    Executive VP

    • Tenure: 15.5yrs
    • Compensation: US$1.62m
  • Chuck Musilli (60yo)

    Executive VP & Chief Human Resources Officer

    • Tenure: 2yrs
  • John Marchioni (49yo)

    President

    • Tenure: 0.7yrs
    • Compensation: US$3.42m
  • Mark Wilcox (51yo)

    Executive VP & CFO

    • Tenure: 3yrs
    • Compensation: US$2.34m
  • Sarita Chakravarthi

    Senior VP of Tax & Assistant Treasurer

    • Tenure: 4.7yrs
  • Tony Harnett (46yo)

    Senior VP & Chief Accounting Officer

    • Tenure: 2yrs
  • Rohan Pai

    Senior VP of Investor Relations & Treasurer

    • Gordon Gaudet (63yo)

      Executive VP & Chief Information Officer

      • Tenure: 6.7yrs
    • Joseph Eppers

      Senior VP & Chief Investment Officer


      Board Members

      • Michael Morrissey (71yo)

        Independent Director

        • Tenure: 11.8yrs
        • Compensation: US$180.55k
      • Ron O'Kelley (74yo)

        Independent Director

        • Tenure: 15yrs
        • Compensation: US$169.06k
      • John Burville (71yo)

        Independent Director

        • Tenure: 14yrs
        • Compensation: US$180.52k
      • Greg Murphy (63yo)

        Chairman & CEO

        • Tenure: 20.7yrs
        • Compensation: US$4.95m
      • J. Thebault (67yo)

        Lead Independent Director

        • Tenure: 2.8yrs
        • Compensation: US$190.56k
      • Bill Rue (71yo)

        Director

        • Tenure: 42.7yrs
        • Compensation: US$157.02k
      • John Marchioni (49yo)

        President

        • Tenure: 0.7yrs
        • Compensation: US$3.42m
      • Cie Nicholson (54yo)

        Independent Director

        • Tenure: 10.4yrs
        • Compensation: US$165.52k
      • John Scheid (63yo)

        Independent Director

        • Tenure: 5.3yrs
        • Compensation: US$192.56k
      • Robert Doherty (60yo)

        Independent Director

        • Tenure: 4.2yrs
        • Compensation: US$176.52k

      Company Information

      Selective Insurance Group, Inc.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Selective Insurance Group, Inc.
      • Ticker: SIGI
      • Exchange: NasdaqGS
      • Founded: 1926
      • Industry: Property and Casualty Insurance
      • Sector: Insurance
      • Market Cap: US$3.956b
      • Shares outstanding: 59.40m
      • Website: https://www.Selective.com

      Number of Employees


      Location

      • Selective Insurance Group, Inc.
      • 40 Wantage Avenue
      • Branchville
      • New Jersey
      • 7890
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      SIGINasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1980
      SV2DB (Deutsche Boerse AG)YesCommon StockDEEURJan 1980

      Biography

      Selective Insurance Group, Inc., together with its subsidiaries, provides insurance products and services in the United States. It operates through four segments: Standard Commercial Lines, Standard Personal Lines, Excess and Surplus Lines, and Investments. The company’s products and services include property insurance, which covers the financial consequences of accidental loss of an insured’s real and/or personal property; and casualty insurance that covers the financial consequences of employee injuries in the course of employment, and bodily injury and/or property damage to a third party as a result of an insured’s negligent acts, omissions, or legal liabilities. It also offers flood insurance products. The company provides its insurance products and services to businesses, non-profit organizations, local government agencies, and individuals through independent retail agents and wholesale general agents. In addition, it invests in fixed income investments and preferred stocks, equity securities, and alternative investment portfolio. Selective Insurance Group, Inc. was founded in 1926 and is headquartered in Branchville, New Jersey. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/23 23:59
      End of Day Share Price2020/01/23 00:00
      Earnings2019/09/30
      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.