NasdaqGS:UFCS

Stock Analysis Report

Executive Summary

United Fire Group, Inc., together with its subsidiaries, provides property and casualty insurance for individuals and businesses in the United States.

Risk Analysis

Earnings have declined by -22.79% per year over past 5 years

Dividend of 3.04% is not well covered by earnings or forecast to be in the next 3 years

Profit margins (0.7%) are lower than last year (7%)



Snowflake Analysis

Second-rate dividend payer and overvalued.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-1.1%

UFCS

-0.4%

US Insurance

0.3%

US Market


1 Year Return

-19.7%

UFCS

20.4%

US Insurance

18.5%

US Market

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

Return vs Market: UFCS underperformed the US Market which returned 18.5% over the past year.


Shareholder returns

UFCSIndustryMarket
7 Day-1.1%-0.4%0.3%
30 Day-2.8%0.4%1.5%
90 Day-5.8%0.9%5.7%
1 Year-17.4%-19.7%23.2%20.4%21.1%18.5%
3 Year-0.7%-12.6%32.2%22.0%45.9%36.4%
5 Year84.8%54.9%67.8%47.8%71.4%52.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is United Fire Group undervalued compared to its fair value and its price relative to the market?

126.4x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: UFCS ($43.46) is trading above our estimate of fair value ($23.5)

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


Price To Earnings Ratio

PE vs Industry: UFCS is poor value based on its PE Ratio (126.4x) compared to the Insurance industry average (16.7x).

PE vs Market: UFCS is poor value based on its PE Ratio (126.4x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate UFCS's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: UFCS is good value based on its PB Ratio (1.1x) compared to the US Insurance industry average (1.2x).


Next Steps

Future Growth

How is United Fire Group forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

2.0%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if UFCS's forecast earnings growth is above the savings rate (1.7%).

Earnings vs Market: Insufficient data to determine if UFCS's earnings are forecast to grow faster than the US market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: UFCS's revenue (2% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: UFCS'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: UFCS's Return on Equity is forecast to be low in 3 years time (1%).


Next Steps

Past Performance

How has United Fire Group performed over the past 5 years?

-22.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: UFCS has high quality earnings.

Growing Profit Margin: UFCS's current net profit margins (0.7%) are lower than last year (7%).


Past Earnings Growth Analysis

Earnings Trend: UFCS's earnings have declined by -22.8% per year over the past 5 years.

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

Earnings vs Industry: UFCS had negative earnings growth (-88.7%) over the past year, making it difficult to compare to the Insurance industry average (-10.4%).


Return on Equity

High ROE: UFCS's Return on Equity (0.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is United Fire 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: UFCS has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if UFCS's debt is covered by short term assets.


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is United Fire Group's current dividend yield, its reliability and sustainability?

3.04%

Current Dividend Yield


Dividend Yield vs Market

company3.0%marketbottom25%1.4%markettop25%3.7%industryaverage2.3%forecastin3Years3.8%

Current dividend yield vs market & industry

Notable Dividend: UFCS's dividend (3.04%) is higher than the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: UFCS's dividend (3.04%) is low compared to the top 25% of dividend payers in the US market (3.7%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (372.3%), UFCS's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: UFCS's dividends in 3 years are not forecast to be well covered by earnings (355.8% payout ratio).


Next Steps

Management

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

5.1yrs

Average management tenure


CEO

Randy Ramlo (58yo)

12.6yrs

Tenure

US$3,131,279

Compensation

Mr. Randy Allan Ramlo serves as President and Chief Executive Officer of United Fire & Casualty Company. Mr. Ramlo has served as President and Chief Executive Officer of United Fire Group, Inc. since May 2 ...


CEO Compensation Analysis

Compensation vs Market: Randy's total compensation ($USD3.13M) is about average for companies of similar size in the US market ($USD2.63M).

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


Management Age and Tenure

5.1yrs

Average Tenure

58yo

Average Age

Experienced Management: UFCS's management team is seasoned and experienced (5.1 years average tenure).


Board Age and Tenure

11.0yrs

Average Tenure

63yo

Average Age

Experienced Board: UFCS's board of directors are seasoned and experienced ( 11 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.


Ownership Breakdown

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


Management Team

  • Mike Wilkins (56yo)

    Executive VP & COO

    • Tenure: 5.6yrs
    • Compensation: US$1.59m
  • Neal Scharmer (63yo)

    VP, General Counsel & Corporate Secretary

    • Tenure: 18.6yrs
    • Compensation: US$879.51k
  • Barrie Ernst (65yo)

    VP & Chief Investment Officer

    • Tenure: 17.9yrs
    • Compensation: US$1.16m
  • Randy Ramlo (58yo)

    President

    • Tenure: 12.6yrs
    • Compensation: US$3.13m
  • Dawn Jaffray (52yo)

    EVP & CFO

    • Tenure: 4.6yrs
    • Compensation: US$1.25m
  • Mike Sheeley (58yo)

    Vice President of Corporate Marketing

    • Tenure: 1.6yrs
  • Jolene Grow

    Assistant VP & Underwriting Manager

    • Tenure: 8.6yrs
  • Brian Frese

    CTO & VP

    • Tenure: 4.1yrs
  • Randy Patten (45yo)

    Assistant VP & Controller

    • Tenure: 4yrs
  • Tracy Bastian

    Vice President of Human Resources

    • Tenure: 2.7yrs

Board Members

  • Jim Noyce (63yo)

    Vice Chairman of the Board

    • Tenure: 4.9yrs
    • Compensation: US$186.23k
  • Christopher Drahozal (57yo)

    Independent Director

    • Tenure: 22.9yrs
    • Compensation: US$148.48k
  • George Milligan (62yo)

    Independent Director

    • Tenure: 20.9yrs
    • Compensation: US$140.48k
  • Mary Quass (69yo)

    Independent Director

    • Tenure: 21.9yrs
    • Compensation: US$148.36k
  • Jack Evans (71yo)

    Chairman

    • Tenure: 10.2yrs
    • Compensation: US$190.48k
  • Kyle Skogman (68yo)

    Independent Director

    • Tenure: 19.9yrs
    • Compensation: US$152.48k
  • Randy Ramlo (58yo)

    President

    • Tenure: 12.6yrs
    • Compensation: US$3.13m
  • JP Besong (66yo)

    Independent Director

    • Tenure: 6.8yrs
    • Compensation: US$131.48k
  • Susan Voss (63yo)

    Independent Director

    • Tenure: 5.8yrs
    • Compensation: US$134.48k
  • Scott Carlton (50yo)

    Independent Director

    • Tenure: 7.6yrs
    • Compensation: US$140.48k

Company Information

United Fire Group, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: United Fire Group, Inc.
  • Ticker: UFCS
  • Exchange: NasdaqGS
  • Founded: 1946
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: US$1.074b
  • Shares outstanding: 25.03m
  • Website: https://www.ufginsurance.com

Number of Employees


Location

  • United Fire Group, Inc.
  • 118 Second Avenue SE
  • Cedar Rapids
  • Iowa
  • 52401
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
UFCSNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJan 1980

Biography

United Fire Group, Inc., together with its subsidiaries, provides property and casualty insurance for individuals and businesses in the United States. The company offers commercial and personal lines of pr ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/08 23:43
End of Day Share Price2019/12/06 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.