NYSE:PRA

Stock Analysis Report

Executive Summary

ProAssurance Corporation, through its subsidiaries, provides property and casualty insurance, and reinsurance products in the United States.

Risk Analysis

Earnings are forecast to decline by an average of -30.7% per year for the next 3 years

Dividend of 4.68% is not well covered by earnings or forecast to be in the next 3 years

Profit margins (3.9%) are lower than last year (9.7%)



Snowflake Analysis

Unattractive dividend payer with poor track record.


Similar Companies

Share Price & News

How has ProAssurance's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

-2.1%

PRA

-0.9%

US Insurance

-0.3%

US Market


1 Year Return

-9.2%

PRA

20.2%

US Insurance

18.6%

US Market

Return vs Industry: PRA underperformed the US Insurance industry which returned 20.2% over the past year.

Return vs Market: PRA underperformed the US Market which returned 18.6% over the past year.


Shareholder returns

PRAIndustryMarket
7 Day-2.1%-0.9%-0.3%
30 Day-7.0%0.8%2.2%
90 Day-5.4%0.8%5.6%
1 Year-4.9%-9.2%23.1%20.2%21.1%18.6%
3 Year-21.5%-38.9%32.2%22.1%45.6%36.2%
5 Year15.0%-21.4%67.6%47.6%71.1%52.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is ProAssurance undervalued compared to its fair value and its price relative to the market?

55.58x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: PRA ($37.18) is trading above our estimate of fair value ($3.93)

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


Price To Earnings Ratio

PE vs Industry: PRA is poor value based on its PE Ratio (55.6x) compared to the Insurance industry average (16.7x).

PE vs Market: PRA is poor value based on its PE Ratio (55.6x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: PRA's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: PRA is overvalued based on its PB Ratio (1.3x) compared to the US Insurance industry average (1.2x).


Next Steps

Future Growth

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

-30.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PRA's earnings are forecast to decline over the next 3 years (-30.7% per year).

Earnings vs Market: PRA's earnings are forecast to decline over the next 3 years (-30.7% per year).

High Growth Earnings: PRA's earnings are forecast to decline over the next 3 years.

Revenue vs Market: PRA's revenue (1.2% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: PRA's revenue (1.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PRA's Return on Equity is forecast to be low in 3 years time (2.5%).


Next Steps

Past Performance

How has ProAssurance performed over the past 5 years?

-23.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PRA has high quality earnings.

Growing Profit Margin: PRA's current net profit margins (3.9%) are lower than last year (9.7%).


Past Earnings Growth Analysis

Earnings Trend: PRA's earnings have declined by -23.1% per year over the past 5 years.

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

Earnings vs Industry: PRA had negative earnings growth (-59.6%) over the past year, making it difficult to compare to the Insurance industry average (-10.4%).


Return on Equity

High ROE: PRA's Return on Equity (2.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is ProAssurance'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: PRA has a low level of unsold assets or inventory.

Debt Coverage by Assets: PRA's debt is covered by short term assets (assets are 3.9x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

What is ProAssurance's current dividend yield, its reliability and sustainability?

4.68%

Current Dividend Yield


Dividend Yield vs Market

company4.7%marketbottom25%1.4%markettop25%3.7%industryaverage2.3%forecastin3Years4.0%

Current dividend yield vs market & industry

Notable Dividend: PRA's dividend (4.68%) is higher than the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: PRA's dividend (4.68%) is in the top 25% of dividend payers in the US market (3.7%)


Stability and Growth of Payments

Stable Dividend: PRA has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: PRA's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (185.4%), PRA's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: PRA's dividends in 3 years are not forecast to be well covered by earnings (239.4% payout ratio).


Next Steps

Management

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

3.6yrs

Average management tenure


CEO

Ned Rand (52yo)

0.4yrs

Tenure

US$1,533,466

Compensation

Mr. Edward Lewis Rand, Jr.., also known as Ned, C.P.A., serves as Chief Executive Officer of ProAssurance Corporation since July 1, 2019, its President since December 3, 2018 and its Director since May 22, ...


CEO Compensation Analysis

Compensation vs Market: Ned's total compensation ($USD1.53M) is below average for companies of similar size in the US market ($USD3.87M).

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


Management Age and Tenure

3.6yrs

Average Tenure

56yo

Average Age

Experienced Management: PRA's management team is considered experienced (3.6 years average tenure).


Board Age and Tenure

5.3yrs

Average Tenure

60.5yo

Average Age

Experienced Board: PRA's board of directors are considered experienced (5.3 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

SellUS$33,76527 Jun 19
John McMahon
EntityIndividual
Shares933
Max PriceUS$36.19

Ownership Breakdown

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


Management Team

  • Ned Rand (52yo)

    CEO, President & Director

    • Tenure: 0.4yrs
    • Compensation: US$1.53m
  • Stan Starnes (70yo)

    Executive Chairman of the Board

    • Tenure: 11.2yrs
    • Compensation: US$2.12m
  • Howard Friedman (60yo)

    Chief Underwriting Officer & Chief Actuary

    • Tenure: 0yrs
    • Compensation: US$1.32m
  • Frank O'Neil (66yo)

    Senior VP of Corporate Communications & Investor Relations

    • Tenure: 18.3yrs
  • Mike Boguski (56yo)

    President of Specialty P&C Operations

    • Tenure: 0.6yrs
    • Compensation: US$1.52m
  • Jeff Lisenby (50yo)

    Executive VP

    • Tenure: 0yrs
    • Compensation: US$1.08m
  • Larry Cochran

    Chief Investment Officer

    • Tenure: 17.9yrs
  • Michael Stoeckert

    CTO & VP

    • Tenure: 5.9yrs
  • Dana Hendricks (51yo)

    EVP & CFO

    • Tenure: 1.3yrs
  • Katie Neville

    Chief Compliance Officer & VP

    • Tenure: 5.9yrs

Board Members

  • Ned Rand (52yo)

    CEO, President & Director

    • Tenure: 0.4yrs
    • Compensation: US$1.53m
  • Robert Flowers (69yo)

    Independent Director

    • Tenure: 18.5yrs
    • Compensation: US$150.55k
  • Stan Starnes (70yo)

    Executive Chairman of the Board

    • Tenure: 11.2yrs
    • Compensation: US$2.12m
  • Sam Di Piazza (68yo)

    Independent Director

    • Tenure: 5.9yrs
    • Compensation: US$163.30k
  • Bruce Angiolillo (66yo)

    Independent Director

    • Tenure: 3.6yrs
    • Compensation: US$155.80k
  • Ziad Haydar (56yo)

    Independent Director

    • Tenure: 4.6yrs
    • Compensation: US$132.80k
  • Jim Gorrie (56yo)

    Independent Director

    • Tenure: 7.6yrs
    • Compensation: US$128.80k
  • Frank Spinosa (64yo)

    Independent Director

    • Tenure: 7.6yrs
    • Compensation: US$153.30k
  • Thomas A. Wilson (57yo)

    Lead Independent Director

    • Tenure: 1.9yrs
    • Compensation: US$139.05k
  • Katisha Vance (44yo)

    Independent Director

    • Tenure: 2.6yrs
    • Compensation: US$130.30k

Company Information

ProAssurance Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ProAssurance Corporation
  • Ticker: PRA
  • Exchange: NYSE
  • Founded: 1976
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: US$1.985b
  • Shares outstanding: 53.79m
  • Website: https://www.proassurance.com

Number of Employees


Location

  • ProAssurance Corporation
  • 100 Brookwood Place
  • Birmingham
  • Alabama
  • 35209
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
PRANYSE (New York Stock Exchange)YesCommon StockUSUSDSep 1991
PRKDB (Deutsche Boerse AG)YesCommon StockDEEURSep 1991

Biography

ProAssurance Corporation, through its subsidiaries, provides property and casualty insurance, and reinsurance products in the United States. The company operates through Specialty Property and Casualty, Wo ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/06 23:44
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.