Stewart Information Services (STC): Evaluating Valuation After Latest Dividend Increase Reflects Ongoing Shareholder Commitment

If you’re following Stewart Information Services (NYSE:STC), you’ve probably noticed the latest announcement catching some attention. The company’s board just approved a 5% increase in the cash dividend, raising the annual payout from $2.00 to $2.10 per share. For investors, this signals management’s ongoing confidence in returning capital, even as questions emerge about the long-term outlook for future payouts, especially with recent declines in earnings per share. Whether this is a positive sign or just a temporary vote of confidence is something anyone holding, or thinking of buying, will want to consider.

This move arrives on the back of a year that has seen both steady performance and some volatility for Stewart Information Services. Over the past year, shares have delivered a 5% total return, with momentum building more recently: the stock is up 16% over the past 3 months and 8% in the past month alone. Looking even longer-term, returns of nearly 59% in three years and 95% over five years highlight the company’s potential for growth, though the shift in earnings trends hints at changing risk perceptions beneath the surface.

Now, with this dividend boost and a share price gaining steam lately, is Stewart Information Services undervalued, or is the market already factoring in future growth and risk?

Most Popular Narrative: 3.7% Undervalued

According to the most widely followed analysis, Stewart Information Services shares are currently considered undervalued relative to their projected future growth and profitability. The narrative suggests that improvements in key business areas could drive material gains ahead, depending on how these forecasts play out.

Stewart Information Services expects improvement in the housing market in the second half of 2025, driven by educated consumers poised to act on changes such as a drop in interest rates. This could potentially boost revenue and earnings.

The company is experiencing significant growth in its Title segment, specifically in commercial services and asset classes like retail and energy. These developments could positively impact revenue and pretax income.

Curious about why this popular view says Stewart's fair value sits above the current market price? There is a financial projection at the core, hinging on bold assumptions about future profits and margin expansion. Want to discover which aggressive forecasts make this stock look so compelling? Dive into the details behind the fair value math and see what could be driving the optimism.

Result: Fair Value of $75.9 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent weakness in the housing market and higher operating costs could limit Stewart’s revenue growth and challenge the bullish outlook.

Find out about the key risks to this Stewart Information Services narrative.

Another View: Market Comparisons Raise New Questions

A different perspective looks at how Stewart Information Services trades compared to the broader industry. While the earlier analysis points to upside potential, this method actually suggests the stock may already be trading at a premium. Which story do you trust?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Stewart Information Services to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Stewart Information Services Narrative

If you see things differently or want to dig into the numbers on your own terms, you can put together your own take in just a few minutes. Do it your way.

A great starting point for your Stewart Information Services research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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