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United Fire Group (UFCS)
:UFCS
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United Fire Group
(NASDAQ:UFCS)
Rating:79Outperform
Price Target:
$32.00
▲(14.82%Upside)
United Fire Group (UFCS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$709.32M
Dividend Yield2.3%
Average Volume (3M)89.33K
Price to Earnings (P/E)11.0
Beta (1Y)0.60
Revenue Growth14.60%
EPS GrowthN/A
CountryUS
Employees877
SectorFinancial
Sector Strength74
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)0.70
Shares Outstanding25,450,872
10 Day Avg. Volume99,310
30 Day Avg. Volume89,335
Financial Highlights & Ratios
PEG Ratio-1.60
Price to Book (P/B)1.21
Price to Sales (P/S)0.00
P/FCF Ratio17.93
Enterprise Value/Market Cap1.40
Enterprise Value/Revenue0.25
Enterprise Value/Gross Profit1.47
Enterprise Value/Ebitda3.03
Forecast
1Y Price Target
$28.00Price Target Upside0.47% Upside
Rating ConsensusHold
Number of Analyst Covering1
United Fire Group Business Overview & Revenue Model
Company DescriptionUnited Fire Group (UFCS) is a publicly-traded insurance company based in Cedar Rapids, Iowa. The company operates primarily in the property and casualty insurance sector, offering a wide range of insurance products, including commercial insurance, personal insurance, and surety bonds. UFCS provides tailored insurance solutions to businesses, families, and individuals across the United States, supporting them with comprehensive coverage and claims services.
How the Company Makes MoneyUnited Fire Group makes money primarily through underwriting and investment activities. The company's revenue model relies on collecting premiums from policyholders in exchange for insurance coverage. These premiums constitute the core revenue stream. UFCS also generates income by investing the premiums it collects in a diversified portfolio of financial assets, including bonds, equities, and real estate. The returns from these investments contribute significantly to the company's earnings. Additionally, UFCS may engage in partnerships with other insurers or reinsurers to manage risk and enhance underwriting capacity, though specific partnerships are not disclosed in this context.
United Fire Group Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: -2.00%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
The earnings call reflected a generally positive outlook with significant achievements in net written premium and investment performance, despite challenges such as increased underwriting expenses and catastrophe losses.Q1-2025 Updates
Positive Updates
Record Net Written Premium and Increased Net Income
The company achieved its third consecutive quarter of underwriting profitability, with net written premium growing 4% to $335.4 million and a significant increase in net income despite industry challenges.
Strong Investment Performance
Net investment income improved to $23.5 million, driven by a sustainable increase in fixed maturity income and favorable valuations on the limited partnership portfolio.
Improvement in Loss Ratios
The underlying loss ratio improved by 2.9 points to 56.5% due to strong earned rate achievement and disciplined portfolio management. Severity trends remained stable.
Positive Trends in Core Commercial Business
Core commercial business experienced a net written premium growth of 6%, with 11.7% renewal premium change and rates up 9.7%, exceeding loss trends.
Negative Updates
Increased Underwriting Expense Ratio
The underwriting expense ratio increased by 3 points to 37.9%, due to costs associated with the development of a new policy administration system and increased performance-based compensation.
Impact of Catastrophe Losses
Catastrophe losses contributed 5 points to the combined ratio, including $8.2 million of losses from California wildfires.
Company Guidance
During United Fire Group Insurance's 2025 first quarter conference call, the company reported key financial metrics highlighting a promising start to the year. The net written premium grew by 4% to $335.4 million, although the growth rate was somewhat suppressed due to unusual reinsurance premium adjustments. The combined ratio increased slightly to 99.4%, while the underlying loss ratio improved by 2.9 points to 56.5%. Catastrophe losses accounted for 5 points of the combined ratio, with $8.2 million attributed to California wildfires. The underwriting expense ratio rose by 3 points to 37.9% due to additional costs from their new policy administration system development and increased performance-based compensation for agents. Net investment income improved to $23.5 million, driven by a $21 million rise in fixed maturity income. The reported book value per share increased to $32.13, with an adjusted book value per share of $34.16. The company also declared and paid a $0.16 per share cash dividend.United Fire Group Financial Statement Overview
Summary
United Fire Group demonstrates strong revenue and cash flow growth, a solid balance sheet with no debt, and improved return on equity, despite challenges with EBIT and EBITDA margins.Income Statement
United Fire Group has shown a strong revenue growth of 14.4% from 2023 to 2024. The gross profit margin remains consistent at 100%, as expected in the insurance industry. The net profit margin improved significantly from a negative position in 2023 to 4.9% in 2024, indicating a turnaround in profitability. However, the absence of positive EBIT and EBITDA margins in the latest reports suggests operational challenges.72
Positive
Balance Sheet
The company has a solid equity position with a debt-to-equity ratio of 0, indicating no debt burden in 2024. The return on equity improved significantly to 7.9% in 2024 from a negative in the previous year, showing efficient use of equity. The equity ratio stands at 22.4%, reflecting a stable financial structure with a significant portion of assets financed by equity.80
Positive
Cash Flow
United Fire Group's free cash flow grew by 104.2% from 2023 to 2024, demonstrating strong cash generation capabilities. The operating cash flow to net income ratio is healthy at 5.5, indicating robust cash flow relative to net earnings. The free cash flow to net income ratio is exceptionally strong at 5.3, further supporting the company's cash flow strength.88
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 681.57M | 86.48M | 1.10B | 980.29M | 1.07B | 1.07B | Gross Profit |
| 676.61M | 79.20M | 1.10B | 980.29M | 1.07B | 1.07B | EBIT |
| 85.08M | 84.31M | -39.72M | 15.27M | 96.84M | -154.29M | EBITDA |
| 97.27M | 84.31M | -25.95M | 22.93M | 106.60M | -162.73M | Net Income Common Stockholders |
| 66.16M | 61.96M | -29.70M | 15.03M | 80.59M | -112.71M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 183.68M | 201.05M | 102.15M | 96.92M | 132.38M | 88.12M | Total Assets |
| 3.53B | 3.49B | 3.14B | 2.88B | 3.01B | 3.07B | Total Debt |
| 0.00 | 117.06M | 50.00M | 50.00M | 50.00M | 50.00M | Net Debt |
| -183.68M | -83.89M | -52.05M | -46.65M | -82.10M | -37.95M | Total Liabilities |
| 2.71B | 2.71B | 2.41B | 2.14B | 2.13B | 2.24B | Stockholders Equity |
| 850.88M | 781.53M | 733.75M | 740.11M | 879.12M | 825.15M |
| Cash Flow | Free Cash Flow | ||||
| 328.06M | 328.43M | 160.85M | -3.39M | 15.94M | 22.57M | Operating Cash Flow |
| 339.82M | 340.30M | 171.74M | -1.25M | 29.92M | 41.44M | Investing Cash Flow |
| -424.52M | -292.49M | -149.89M | -19.17M | 31.73M | -92.87M | Financing Cash Flow |
| 50.59M | 51.09M | -16.45M | -15.03M | -17.49M | 18.66M |
United Fire Group Technical Analysis
Positive
27.87
Price Trends
27.64
Positive
27.32
Positive
25.66
Positive
Market Momentum
0.10
Positive
52.70
Neutral
47.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UFCS, the sentiment is Positive. The current price of 27.87 is below the 20-day moving average (MA) of 28.14, above the 50-day MA of 27.64, and above the 200-day MA of 25.66, indicating a bullish trend. The MACD of 0.10 indicates Positive momentum. The RSI at 52.70 is Neutral, neither overbought nor oversold. The STOCH value of 47.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for UFCS.
United Fire Group Risk Analysis
United Fire Group disclosed 20 risk factors in its most recent earnings report. United Fire Group reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
United Fire Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $709.32M | 10.98 | 8.51% | 2.30% | 14.60% | ― | |
78 Outperform | $744.15M | 11.57 | 16.95% | 2.42% | 7.24% | -9.28% | |
76 Outperform | $725.55M | 9.25 | 27.59% | ― | 11.41% | 53.85% | |
74 Outperform | $677.03M | 9.37 | 13.11% | 3.87% | 5.29% | 1200.44% | |
69 Neutral | $463.93M | 16.27 | 4.14% | 4.31% | -10.61% | -19.48% | |
64 Neutral | $12.87B | 9.76 | 7.85% | 78.04% | 12.07% | -7.94% | |
61 Neutral | $506.74M | 6.92 | 31.11% | ― | 12.19% | 5.12% |
* Financial Sector Average
Performance Comparison
UFCS
United Fire Group
28.29
7.56
36.47%
DGICA
Donegal Group
19.15
6.74
54.31%
GBLI
Global Indemnity
32.99
3.48
11.79%
UVE
Universal Insurance Holdings
26.71
8.97
50.56%
ACIC
American Coastal Insurance
10.48
0.04
0.38%
HRTG
Heritage Insurance Holdings
23.41
15.91
212.13%
United Fire Group Corporate Events
Dividends
United Fire Group Declares Quarterly Dividend
Positive
May 21, 2025
On May 21, 2025, United Fire Group, Inc. declared a quarterly cash dividend of $0.16 per share, payable on June 20, 2025, to shareholders of record as of June 6, 2025. This marks the 229th consecutive quarterly dividend since March 1968, underscoring UFG’s commitment to shareholder returns and its stable financial practices.
The most recent analyst rating on (UFCS) stock is a Hold with a $26.00 price target. To see the full list of analyst forecasts on United Fire Group stock, see the UFCS Stock Forecast page.
Executive/Board ChangesShareholder Meetings
United Fire Group Holds Annual Shareholders Meeting
Neutral
May 21, 2025
On May 21, 2025, United Fire Group, Inc. held its Annual Meeting of Shareholders, where three Class B directors were elected to serve three-year terms expiring in 2028. The shareholders also ratified the appointment of Ernst & Young LLP as the independent registered public accounting firm for 2025 and approved the compensation of the company’s named executive officers.
The most recent analyst rating on (UFCS) stock is a Hold with a $26.00 price target. To see the full list of analyst forecasts on United Fire Group stock, see the UFCS Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.