NYSE:RLI

Stock Analysis Report

Executive Summary

RLI Corp., an insurance holding company, underwrites property and casualty insurance in the United States and internationally.


Snowflake Analysis

Proven track record second-rate dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

-5.1%

RLI

-1.5%

US Insurance

-1.1%

US Market


1 Year Return

27.8%

RLI

16.3%

US Insurance

17.9%

US Market

Return vs Industry: RLI exceeded the US Insurance industry which returned 16.3% over the past year.

Return vs Market: RLI exceeded the US Market which returned 17.9% over the past year.


Shareholder returns

RLIIndustryMarket
7 Day-5.1%-1.5%-1.1%
30 Day-4.8%3.0%1.4%
90 Day-7.3%5.2%6.9%
1 Year30.4%27.8%19.1%16.3%20.3%17.9%
3 Year68.8%54.7%34.4%24.0%47.8%38.3%
5 Year124.7%88.3%72.0%51.3%71.9%53.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

21.52x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: RLI ($91.11) is trading above our estimate of fair value ($54.98)

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


Price To Earnings Ratio

PE vs Industry: RLI is poor value based on its PE Ratio (21.5x) compared to the Insurance industry average (13.4x).

PE vs Market: RLI is poor value based on its PE Ratio (21.5x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: RLI is overvalued based on its PB Ratio (4.1x) compared to the US Insurance industry average (1.1x).


Next Steps

Future Growth

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

-21.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RLI's earnings are forecast to decline over the next 3 years (-21.6% per year).

Earnings vs Market: RLI's earnings are forecast to decline over the next 3 years (-21.6% per year).

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

Revenue vs Market: RLI's revenue (2.3% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: RLI's revenue (2.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RLI's Return on Equity is forecast to be low in 3 years time (11.5%).


Next Steps

Past Performance

How has RLI performed over the past 5 years?

-2.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RLI has high quality earnings.

Growing Profit Margin: RLI's current net profit margins (19.1%) are higher than last year (7.8%).


Past Earnings Growth Analysis

Earnings Trend: RLI's earnings have declined by -2.2% per year over the past 5 years.

Accelerating Growth: RLI's earnings growth over the past year (198.6%) exceeds its 5-year average (-2.2% per year).

Earnings vs Industry: RLI earnings growth over the past year (198.6%) exceeded the Insurance industry 32.1%.


Return on Equity

High ROE: RLI's Return on Equity (19.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

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

Debt Coverage by Assets: RLI's debt is covered by short term assets (assets are 4.9x debt).


Financial Institutions Analysis

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

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

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

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

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

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


Next Steps

Dividend

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

2.11%

Current Dividend Yield


Upcoming Dividend Payment

TodayFeb 23 2020Ex Dividend DateFeb 27 2020Dividend Pay DateMar 20 202022 days from Ex DividendBuy in the next 3 days to receive upcoming dividend

Dividend Yield vs Market

Notable Dividend: RLI's dividend (2.11%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: RLI's dividend (2.11%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (21.5%), RLI's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RLI's dividends in 3 years are not forecast to be well covered by earnings (96.2% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.4yrs

Average management tenure


CEO

Jon Michael (66yo)

19.1yrs

Tenure

US$3,212,994

Compensation

Mr. Jonathan Edward Michael, also known as Jon, has been Chairman of the Board of RLI Corp. since May 5, 2011 and has been its Chief Executive Officer since January 1, 2001. He served as President of RLI C ...


CEO Compensation Analysis

Compensation vs Market: Jon's total compensation ($USD3.21M) is below average for companies of similar size in the US market ($USD4.87M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Jonathan Michael
Chairman & CEO19.1yrsUS$3.21m2.58% $105.3m
Craig Kliethermes
President & COO0yrsUS$1.86m0.25% $10.2m
Jeffrey Fick
Senior VP3.3yrsUS$640.11k0.15% $6.1m
Jennifer Klobnak
Senior Vice President of Operations0yrsUS$822.59k0.077% $3.2m
Todd Bryant
VP & CFO0.6yrsno data0.10% $4.1m
Aaron Diefenthaler
VP, Chief Investment Officer & Treasurer8.1yrsno data0.052% $2.1m
Kathleen Taylor
Vice President - Accounting Operations1.1yrsno datano data
Bryan Fowler
VP & Chief Information Officer2.4yrsno datano data
Lisa Gates
Vice President of Marketing & Communications1.1yrsno datano data
Kathleen Kappes
Vice President of Human Resources0yrsno datano data

2.4yrs

Average Tenure

52yo

Average Age

Experienced Management: RLI's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jonathan Michael
Chairman & CEO19.1yrsUS$3.21m2.58% $105.3m
Michael Stone
Director7.5yrsUS$150.00k0.58% $23.8m
Kaj Ahlmann
Independent Director11yrsUS$155.00k0.0018% $74.8k
Robert Restrepo
Independent Director3.6yrsUS$150.00k0.022% $894.0k
Jordan Graham
Independent Director15.3yrsUS$160.00k0.011% $465.2k
John Baily
Lead Director0yrsUS$170.00k0.17% $7.0m
David Duclos
Independent Director2.8yrsUS$163.18k0.011% $459.5k
Michael Angelina
Independent Director6.2yrsUS$165.00k0.022% $913.7k
Calvin Butler
Independent Director3.3yrsUS$155.00k0.015% $596.0k
Susan Fleming
Independent Director1.5yrsUS$88.15k0.0029% $119.8k

6.2yrs

Average Tenure

63.5yo

Average Age

Experienced Board: RLI's board of directors are considered experienced (6.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: RLI insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2%.


Top Shareholders

Company Information

RLI Corp.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: RLI Corp.
  • Ticker: RLI
  • Exchange: NYSE
  • Founded: 1965
  • Industry: Property and Casualty Insurance
  • Sector: Insurance
  • Market Cap: US$4.088b
  • Shares outstanding: 44.87m
  • Website: https://www.rlicorp.com

Number of Employees


Location

  • RLI Corp.
  • 9025 North Lindbergh Drive
  • Peoria
  • Illinois
  • 61615
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RLINYSE (New York Stock Exchange)YesCommon StockUSUSDDec 1972
RL1DB (Deutsche Boerse AG)YesCommon StockDEEURDec 1972

Biography

RLI Corp., an insurance holding company, underwrites property and casualty insurance in the United States and internationally. Its Casualty segment provides commercial and personal coverage products; and general liability products, such as coverage for third-party liability of commercial insureds, including manufacturers, contractors, apartments, and mercantile. This segment also offers coverages for security guards and in the areas of onshore energy-related businesses and environmental liability for underground storage tanks, contractors and asbestos, and environmental remediation specialists; and professional liability coverages focuses on providing errors and omission coverage to small to medium-sized design, technical, computer, and miscellaneous professionals. In addition, this segment provides commercial automobile liability and physical damage insurance to local, intermediate and long haul truckers, public transportation entities, and equipment dealers; incidental and related insurance coverages; inland marine coverages; management liability coverages, such as directors and officers liability insurance, fiduciary liability and fidelity coverages, and for low to moderate classes of risks, including public and private businesses; and healthcare liability and home business insurance products. The company’s Property segment offers commercial property, cargo, hull, protection and indemnity, marine liability, inland marine, homeowners’ and dwelling fire, and other property insurance products. Its Surety segment offers small bonds for businesses and individuals; bonds for small to medium-sized contractors; commercial surety bonds for medium-to-large businesses; and commercial surety bonds for the energy, petrochemical, and refining industries. The company also underwrites various reinsurance coverages. The company markets its products through branch offices and independent agents. RLI Corp. was founded in 1965 and is headquartered in Peoria, Illinois. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 01:05
End of Day Share Price2020/02/21 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.