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United Fire Group (UFCS)
:UFCS
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United Fire Group
(NASDAQ:UFCS)
76Outperform
United Fire Group (UFCS) vs. S&P 500 (SPY)
Market Cap
$727.01M
Dividend Yield2.23%
Average Volume (3M)109.76K
Price to Earnings (P/E)12.0
Beta (1Y)0.58
Revenue Growth14.41%
EPS GrowthN/A
CountryUS
Employees877
SectorFinancial
Sector Strength88
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)2.39
Shares Outstanding25,393,131
10 Day Avg. Volume103,277
30 Day Avg. Volume109,756
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.22
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit0.71
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$29.00Price Target Upside1.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
United Fire Group Business Overview & Revenue Model
Company DescriptionUnited Fire Group (UFCS) is a publicly traded insurance company headquartered in Cedar Rapids, Iowa. It specializes in providing property and casualty insurance products, primarily in the commercial insurance sector. The company's offerings include commercial property, general liability, workers' compensation, and auto insurance. UFCS serves a wide range of clients, from small businesses to larger commercial enterprises, and operates primarily through a network of independent insurance agents across the United States.
How the Company Makes MoneyUnited Fire Group generates revenue primarily through the underwriting of insurance policies and the investment of premiums collected. The company earns money by charging premiums for the insurance coverage it provides to its customers. These premiums are calculated based on the perceived risk associated with insuring a particular client or asset. In addition to underwriting income, UFCS invests the premiums collected into a diversified portfolio of securities to generate investment income, which also contributes significantly to its overall revenue. The company's profitability is influenced by its ability to accurately assess risk, manage claims expenses, and achieve favorable investment returns. Key revenue streams for UFCS include commercial insurance premiums, investment income, and partnerships with independent insurance agents who help distribute its products.
United Fire Group Financial Statement Overview
Summary
United Fire Group has demonstrated strong revenue and cash flow growth, with significant improvements in net profit margin and return on equity. The absence of debt and solid cash flow generation underscore a robust financial position, although operational challenges remain due to weak 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 | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.25B | 1.10B | 980.29M | 1.07B | 1.07B | Gross Profit |
| 1.25B | 1.10B | 980.29M | 1.07B | 1.07B | EBIT |
| 0.00 | -36.50M | 15.27M | 96.64M | -175.78M | EBITDA |
| 0.00 | -25.95M | 22.93M | 106.60M | -162.73M | Net Income Common Stockholders |
| 61.96M | -29.70M | 15.03M | 80.59M | -112.71M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 201.05M | 102.15M | 96.92M | 132.38M | 88.12M | Total Assets |
| 3.49B | 3.14B | 2.88B | 3.01B | 3.07B | Total Debt |
| 117.06M | 50.00M | 50.00M | 50.00M | 50.00M | Net Debt |
| -83.89M | -52.05M | -46.65M | -82.10M | -37.95M | Total Liabilities |
| 2.71B | 2.41B | 2.14B | 76.75M | 74.93M | Stockholders Equity |
| 781.53M | 733.75M | 740.11M | 879.12M | 825.15M |
| Cash Flow | Free Cash Flow | |||
| 328.43M | 160.85M | -3.39M | 15.94M | 22.57M | Operating Cash Flow |
| 340.30M | 171.74M | -1.25M | 29.92M | 41.44M | Investing Cash Flow |
| -292.49M | -149.89M | -19.17M | 31.73M | -92.87M | Financing Cash Flow |
| 51.09M | -16.45M | -15.03M | -17.49M | 18.66M |
United Fire Group Technical Analysis
Positive
28.63
Price Trends
27.76
Negative
27.57
Positive
24.54
Positive
Market Momentum
-0.03
Negative
50.71
Neutral
69.22
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 28.63 is above the 20-day moving average (MA) of 27.26, above the 50-day MA of 27.76, and above the 200-day MA of 24.54, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 50.71 is Neutral, neither overbought nor oversold. The STOCH value of 69.22 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $727.01M | 11.98 | 8.18% | 2.23% | 14.41% | ― | |
75 Outperform | $710.37M | 11.05 | 16.95% | 2.54% | 7.24% | -9.28% | |
74 Outperform | $684.44M | 9.59 | 13.11% | 3.52% | 5.29% | 1200.44% | |
72 Outperform | $603.75M | 9.70 | 24.08% | ― | 10.84% | 16.40% | |
67 Neutral | $405.36M | 9.10 | 6.46% | 4.85% | -16.46% | 69.94% | |
64 Neutral | $12.64B | 9.74 | 8.05% | 17044.60% | 12.66% | -4.62% | |
56 Neutral | $564.73M | 7.46 | 37.69% | ― | 1.00% | -77.16% |
* Financial Sector Average
Performance Comparison
UFCS
United Fire Group
28.63
5.96
26.29%
DGICA
Donegal Group
19.60
6.70
51.94%
GBLI
Global Indemnity
28.43
-2.61
-8.41%
UVE
Universal Insurance Holdings
25.24
5.91
30.57%
ACIC
American Coastal Insurance
11.69
1.73
17.37%
HRTG
Heritage Insurance Holdings
19.48
11.26
136.98%
United Fire Group Earnings Call Summary
Earnings Call Date:Feb 11, 2025
(Q4-2024)
| % Change Since: 14.89%|
Next Earnings Date:May 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements, including record net written premiums, improved underwriting profitability, and strong investment portfolio performance. However, challenges such as social inflation and an elevated expense ratio were noted, indicating areas of concern. Overall, the positive aspects outweighed the negative, suggesting favorable progress.Q4-2024 Updates
Positive Updates
Record Net Written Premiums
In 2024, United Fire Group achieved the highest level of net written premium in its 79-year history.
Strong Combined Ratio and Operating Income
The company produced the best annual combined ratio and the highest adjusted operating income since 2000.
Improvement in Underwriting Profitability
The fourth quarter underlying loss ratio improved by 4.3 points from the fourth quarter of 2023.
Successful Catastrophe Management
The fourth quarter catastrophe loss ratio was 1.6%, well below historical averages. Full-year catastrophe loss ratio was 5.4%, below historical averages by 3.3 and 1.8 points.
Enhanced Investment Portfolio
Annualized book yield improved by more than 80 basis points. Net investment income grew by 21% in the fourth quarter compared to 2023.
Negative Updates
Social Inflation Challenges
The industry faces significant challenges due to increased litigation activity, delaying claim reporting and settlement timelines.
Elevated Expense Ratio
Increased performance-based compensation costs impacted the fourth quarter and full-year underwriting expense ratio.
Company Guidance
During the United Fire Group, Inc. 2024 Fourth Quarter Conference Call, the company highlighted several key metrics that marked a successful year. United Fire Group achieved its highest net written premium in its 79-year history, coupled with the best annual combined ratio and highest adjusted operating income since 2000. The fourth quarter underlying loss ratio improved to 55.7%, a 4.3-point improvement from the previous year. The company also reported a fourth quarter catastrophe loss ratio of 1.6%, well below its historical averages. Total net investment income for the fourth quarter was $23.2 million, reflecting a 21% increase from the previous year, while full-year net investment income rose to $82 million. Additionally, the company added $175 million in reserves for general liability, umbrella, and excess casualty lines for accident years 2023 and prior. Fourth quarter net income was reported at $1.21 per diluted share, with a full-year figure of $2.39. The adjusted book value per share increased by $1.95, reaching $33.64 by year-end.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.