NasdaqGS:STFC

Stock Analysis Report

Executive Summary

State Auto Financial Corporation, through its subsidiaries, engages in writing personal and business insurance products.

Rewards

Earnings are forecast to grow 10.96% per year

Earnings grew by 28% over the past year

Risk Analysis

No risks detected for STFC from our risk checks.


Snowflake Analysis

Proven track record unattractive dividend payer.


Similar Companies

Share Price & News

How has State Auto Financial's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

2.1%

STFC

1.7%

US Insurance

1.1%

US Market


1 Year Return

-6.4%

STFC

22.4%

US Insurance

17.8%

US Market

Return vs Industry: STFC underperformed the US Insurance industry which returned 22.4% over the past year.

Return vs Market: STFC underperformed the US Market which returned 17.8% over the past year.


Shareholder returns

STFCIndustryMarket
7 Day2.1%1.7%1.1%
30 Day0.06%0.4%1.4%
90 Day-4.0%0.5%3.9%
1 Year-5.5%-6.4%25.4%22.4%20.3%17.8%
3 Year26.7%22.2%32.5%22.3%44.8%35.4%
5 Year64.2%52.9%69.4%49.1%71.3%52.4%

Price Volatility Vs. Market

How volatile is State Auto Financial's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is State Auto Financial undervalued compared to its fair value and its price relative to the market?

45.8x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: STFC ($31.98) is trading above our estimate of fair value ($2)

Significantly Below Fair Value: STFC is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: STFC is poor value based on its PE Ratio (45.8x) compared to the Insurance industry average (16.7x).

PE vs Market: STFC is poor value based on its PE Ratio (45.8x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: STFC is poor value based on its PEG Ratio (4.2x)


Price to Book Ratio

PB vs Industry: STFC is overvalued based on its PB Ratio (1.5x) compared to the US Insurance industry average (1.2x).


Next Steps

Future Growth

How is State Auto Financial forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

11.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STFC's forecast earnings growth (11% per year) is above the savings rate (1.7%).

Earnings vs Market: STFC's earnings (11% per year) are forecast to grow slower than the US market (14.2% per year).

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

Revenue vs Market: STFC's revenue (4.8% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: STFC's revenue (4.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: STFC's Return on Equity is forecast to be low in 3 years time (7.8%).


Next Steps

Past Performance

How has State Auto Financial performed over the past 5 years?

-32.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: STFC has high quality earnings.

Growing Profit Margin: STFC's current net profit margins (2.3%) are higher than last year (1.7%).


Past Earnings Growth Analysis

Earnings Trend: STFC's earnings have declined by -32.8% per year over the past 5 years.

Accelerating Growth: STFC's earnings growth over the past year (28%) exceeds its 5-year average (-32.8% per year).

Earnings vs Industry: STFC earnings growth over the past year (28%) exceeded the Insurance industry -10.4%.


Return on Equity

High ROE: STFC's Return on Equity (3.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is State Auto Financial'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: STFC has a low level of unsold assets or inventory.

Debt Coverage by Assets: STFC's debt is not covered by short term assets (assets are 0.9x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is State Auto Financial's current dividend yield, its reliability and sustainability?

1.25%

Current Dividend Yield


Upcoming Dividend Payment

Purchase State Auto Financial before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

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

Current dividend yield vs market & industry

Notable Dividend: STFC's dividend (1.25%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: STFC's dividend (1.25%) is low compared to the top 25% of dividend payers in the US market (3.67%).


Stability and Growth of Payments

Stable Dividend: STFC's dividend payments have been volatile in the past 10 years.

Growing Dividend: STFC's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (57.3%), STFC's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: STFC's dividends in 3 years are forecast to be well covered by earnings (21.3% payout ratio).


Next Steps

Management

What is the CEO of State Auto Financial's salary, the management and board of directors tenure and is there insider trading?

4.5yrs

Average management tenure


CEO

Mike LaRocco (62yo)

4.6yrs

Tenure

US$6,191,934

Compensation

Mr. Michael Edward LaRocco, also known as Mike, has been the President, Chief Executive Officer and Director of State Auto Financial Corporation since May 2015 and its Chairman since January 2016. He serve ...


CEO Compensation Analysis

Compensation vs Market: Mike's total compensation ($USD6.19M) is above average for companies of similar size in the US market ($USD3.87M).

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


Management Age and Tenure

4.5yrs

Average Tenure

54yo

Average Age

Experienced Management: STFC's management team is considered experienced (4.5 years average tenure).


Board Age and Tenure

4.6yrs

Average Tenure

64yo

Average Age

Experienced Board: STFC's board of directors are considered experienced (4.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$31,02507 Aug 19
Michelle Lantow
EntityIndividual
Shares1,000
Max PriceUS$31.03
BuyUS$4,95005 Aug 19
Kym Hubbard
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares150
Max PriceUS$33.00

Ownership Breakdown

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


Management Team

  • Matthew Pollak (53yo)

    VP, Chief Accounting Officer & Treasurer

    • Tenure: 6.7yrs
  • Mike LaRocco (62yo)

    Chairman

    • Tenure: 4.6yrs
    • Compensation: US$6.19m
  • Greg Tacchetti (50yo)

    Senior VP and Chief Information & Strategy Officer

    • Tenure: 4.3yrs
    • Compensation: US$1.85m
  • Paul Stachura (61yo)

    Senior VP and Chief Claims & Risk Engineering Officer

    • Tenure: 4.3yrs
    • Compensation: US$1.81m
  • Steve English (58yo)

    Senior VP & CFO

    • Tenure: 13yrs
    • Compensation: US$2.21m
  • Scott Jones (55yo)

    VP & Chief Investment Officer

    • Tenure: 7.8yrs
  • Kim Garland (53yo)

    Senior VP of Commercial Lines & MD of State Auto Labs

    • Tenure: 4.3yrs
    • Compensation: US$2.13m
  • Tara Shull

    Vice President of Financial

    • Tenure: 0yrs
  • Melissa Centers (47yo)

    Senior VP

    • Tenure: 4.1yrs
  • Natalie Schoolcraft

    Director of Investor Relations

    • Tenure: 0yrs

Board Members

  • Sisi Pouraghabagher (48yo)

    Independent Director

    • Tenure: 2.5yrs
    • Compensation: US$165.51k
  • David Meuse (74yo)

    Lead Director

    • Tenure: 4.6yrs
    • Compensation: US$193.01k
  • Mike LaRocco (62yo)

    Chairman

    • Tenure: 4.6yrs
    • Compensation: US$6.19m
  • Sharon Roberts (66yo)

    Independent Director

    • Tenure: 17.9yrs
    • Compensation: US$165.51k
  • Bob Baker (72yo)

    Independent Director

    • Tenure: 12.6yrs
    • Compensation: US$178.01k
  • Mike Fiorile (65yo)

    Independent Director

    • Tenure: 4.6yrs
    • Compensation: US$180.51k
  • Kym Hubbard (62yo)

    Independent Director

    • Tenure: 3.3yrs
    • Compensation: US$165.51k
  • Eileen Mallesch (63yo)

    Independent Director

    • Tenure: 9.3yrs
    • Compensation: US$183.01k

Company Information

State Auto Financial Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: State Auto Financial Corporation
  • Ticker: STFC
  • Exchange: NasdaqGS
  • Founded: 1990
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: US$1.384b
  • Shares outstanding: 43.56m
  • Website: https://www.stateauto.com

Number of Employees


Location

  • State Auto Financial Corporation
  • 518 East Broad Street
  • Columbus
  • Ohio
  • 43215
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
STFCNasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDJun 1991

Biography

State Auto Financial Corporation, through its subsidiaries, engages in writing personal and business insurance products. It operates through four segments: Personal Insurance, Commercial Insurance, Special ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/10 23:44
End of Day Share Price2019/12/10 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.