NYSE:HRTG

Stock Analysis Report

Heritage Insurance Holdings

Executive Summary

Heritage Insurance Holdings, Inc., through its subsidiaries, provides personal and commercial residential insurance products.

Rewards

PE ratio (18.8x) is below the US market (18.9x)

Earnings are forecast to grow 42.02% per year

Earnings grew by 8.6% over the past year

Risk Analysis

Unstable dividend track record

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Progressive

NYSE:PGR

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.3%

HRTG

1.2%

US Insurance

1.7%

US Market


1 Year Return

-14.1%

HRTG

18.6%

US Insurance

23.2%

US Market

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

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


Shareholder returns

HRTGIndustryMarket
7 Day2.3%1.2%1.7%
30 Day-1.0%1.1%4.2%
90 Day-7.4%4.0%11.9%
1 Year-12.7%-14.1%21.7%18.6%25.8%23.2%
3 Year-8.8%-13.1%36.2%25.7%52.8%42.9%
5 Year-27.0%-31.7%73.2%52.4%75.2%55.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Heritage Insurance Holdings undervalued compared to its fair value and its price relative to the market?

18.83x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: HRTG ($12.91) is trading above our estimate of fair value ($11.6)

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


Price To Earnings Ratio

PE vs Industry: HRTG is poor value based on its PE Ratio (18.8x) compared to the Insurance industry average (16.4x).

PE vs Market: HRTG is good value based on its PE Ratio (18.8x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: HRTG is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: HRTG is good value based on its PB Ratio (0.8x) compared to the US Insurance industry average (1.2x).


Next Steps

Future Growth

How is Heritage Insurance Holdings forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

42.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HRTG's forecast earnings growth (42% per year) is above the savings rate (1.7%).

Earnings vs Market: HRTG's earnings (42% per year) are forecast to grow faster than the US market (14.3% per year).

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

Revenue vs Market: HRTG's revenue (5.9% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: HRTG's revenue (5.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HRTG's Return on Equity is forecast to be low in 3 years time (10.5%).


Next Steps

Past Performance

How has Heritage Insurance Holdings performed over the past 5 years?

-35.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HRTG has a large one-off loss of $10.4M impacting its September 30 2019 financial results.

Growing Profit Margin: HRTG's current net profit margins (4%) are higher than last year (3.9%).


Past Earnings Growth Analysis

Earnings Trend: HRTG's earnings have declined by -35.3% per year over the past 5 years.

Accelerating Growth: HRTG's earnings growth over the past year (8.6%) exceeds its 5-year average (-35.3% per year).

Earnings vs Industry: HRTG earnings growth over the past year (8.6%) exceeded the Insurance industry -11.3%.


Return on Equity

High ROE: HRTG's Return on Equity (4.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Heritage Insurance Holdings'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: HRTG has a low level of unsold assets or inventory.

Debt Coverage by Assets: HRTG's debt is covered by short term assets (assets are 6.6x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is Heritage Insurance Holdings's current dividend yield, its reliability and sustainability?

1.85%

Current Dividend Yield


Dividend Yield vs Market

company1.9%marketbottom25%1.4%markettop25%3.6%industryaverage2.3%forecastin3Years1.9%

Current dividend yield vs market & industry

Notable Dividend: HRTG's dividend (1.86%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: HRTG's dividend (1.86%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, HRTG has been paying a dividend for less than 10 years.

Growing Dividend: HRTG's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (34.9%), HRTG's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HRTG's dividends in 3 years are forecast to be thoroughly covered by earnings (13.5% payout ratio).


Next Steps

Management

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

5.1yrs

Average management tenure


CEO

Bruce Lucas (47yo)

5.7yrs

Tenure

US$8,735,043

Compensation

Mr. Bruce Thomas Lucas has been the Chairman of the Board & Chief Executive Officer of Heritage Insurance Holdings, Inc. since August 2012 and since May 2014 respectively. Mr. Lucas serves Chief Investment ...


CEO Compensation Analysis

Compensation vs Market: Bruce's total compensation ($USD8.74M) is above average for companies of similar size in the US market ($USD1.70M).

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


Management Age and Tenure

5.1yrs

Average Tenure

58yo

Average Age

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


Board Age and Tenure

5.8yrs

Average Tenure

51.5yo

Average Age

Experienced Board: HRTG's board of directors are considered experienced (5.8 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$9,32008 Aug 19
Steven Martindale
EntityIndividual
Role
Member of the Board of Directors
Director
Shares671
Max PriceUS$13.89
BuyUS$71,95015 May 19
Bruce Lucas
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares5,000
Max PriceUS$14.39
BuyUS$71,65810 May 19
Kirk Lusk
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares5,000
Max PriceUS$14.33
BuyUS$15,55913 Mar 19
Steven Martindale
EntityIndividual
Role
Member of the Board of Directors
Director
Shares1,109
Max PriceUS$14.03
BuyUS$25,14008 Mar 19
Bruce Lucas
EntityIndividual
Role
Chief Executive Officer
Chairman & CEO
Shares1,806
Max PriceUS$13.92

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 13.4%.


Management Team

  • Richard Widdicombe (60yo)

    President & Director

    • Tenure: 8yrs
    • Compensation: US$2.72m
  • Steve Rohde (68yo)

    Advisory

    • Tenure: 3.6yrs
    • Compensation: US$959.41k
  • Kirk Lusk (58yo)

    Chief Financial Officer

    • Tenure: 1.8yrs
  • Sharon Binnun (57yo)

    Chief Accounting Officer

    • Tenure: 3.7yrs
  • Joe Peiso (60yo)

    Vice President of Compliance

    • Tenure: 5.7yrs
  • Arash Soleimani

    Executive Vice President

    • Tenure: 0.9yrs
  • Bruce Lucas (47yo)

    Chairman & CEO

    • Tenure: 5.7yrs
    • Compensation: US$8.74m
  • Ernie Garateix (47yo)

    Chief Operating Officer

    • Tenure: 5.1yrs
    • Compensation: US$1.43m
  • Randy Jones

    President of Commercial Division

    • Tenure: 5.9yrs
  • Arlene Luis

    Executive Vice President of Commercial


    Board Members

    • Richard Widdicombe (60yo)

      President & Director

      • Tenure: 8yrs
      • Compensation: US$2.72m
    • Steve Martindale (56yo)

      Director

      • Tenure: 2yrs
      • Compensation: US$150.00k
    • Mark Berset (73yo)

      Director

      • Tenure: 0.5yrs
    • Bruce Lucas (47yo)

      Chairman & CEO

      • Tenure: 5.7yrs
      • Compensation: US$8.74m
    • Pete Apostolou (44yo)

      Independent Director

      • Tenure: 7.4yrs
      • Compensation: US$150.00k
    • James Masiello (78yo)

      Independent Director

      • Tenure: 5.8yrs
      • Compensation: US$150.00k
    • Nicholas Pappas (44yo)

      Independent Director

      • Tenure: 5.8yrs
      • Compensation: US$150.00k
    • Joseph Vattamattam (42yo)

      Independent Director

      • Tenure: 5.8yrs
      • Compensation: US$150.00k
    • Vijay Walvekar (72yo)

      Independent Director

      • Tenure: 7.4yrs
      • Compensation: US$150.00k
    • Irini Barlas (47yo)

      Independent Director

      • Tenure: 5.4yrs
      • Compensation: US$150.00k

    Company Information

    Heritage Insurance Holdings, Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Heritage Insurance Holdings, Inc.
    • Ticker: HRTG
    • Exchange: NYSE
    • Founded: 2012
    • Industry: Property and Casualty Insurance
    • Sector: Insurance
    • Market Cap: US$375.371m
    • Shares outstanding: 28.96m
    • Website: https://www.heritagepci.com

    Number of Employees


    Location

    • Heritage Insurance Holdings, Inc.
    • 2600 McCormick Drive
    • Suite 300
    • Clearwater
    • Florida
    • 33759
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    HRTGNYSE (New York Stock Exchange)YesCommon StockUSUSDMay 2014

    Biography

    Heritage Insurance Holdings, Inc., through its subsidiaries, provides personal and commercial residential insurance products. The company offers personal residential property insurance for single-family homeowners and condominium owners; rental property insurance; and commercial residential insurance in Alabama, Connecticut, Florida, Georgia, Hawaii, Massachusetts, New York, New Jersey, North Carolina, Rhode Island, and South Carolina, as well as residential wind-only property insurance. As of December 31, 2018, it had approximately 512,793 personal residential policies and 3,000 commercial residential policies. The company markets and writes its voluntary personal line policies through a network of retail independent agents, wholesale agents, and a partnership with a direct agency, as well as indirectly to approximately 1,500 retail locations through 8 wholesale agency relationships. It also provides restoration, and emergency and recovery services; and property management, retail agency, and reinsurance services. The company was founded in 2012 and is headquartered in Clearwater, Florida. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/17 02:17
    End of Day Share Price2020/01/16 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.