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United Fire Group (UFCS)
NASDAQ:UFCS
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United Fire Group
(NASDAQ:UFCS)
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Rating:79Outperform
Price Target:
$35.00
▲(7.69% Upside)
United Fire Group's strong financial performance and attractive valuation are the primary drivers of its high score. The bullish technical indicators and positive corporate events further support the stock's potential, although caution is advised due to nearing overbought technical signals and some operational challenges.
United Fire Group (UFCS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$807.33M
Dividend Yield2.01%
Average Volume (3M)125.81K
Price to Earnings (P/E)8.9
Beta (1Y)0.57
Revenue Growth14.28%
EPS Growth148.61%
CountryUS
Employees877
SectorFinancial
Sector Strength70
IndustryInsurance - Property & Casualty
Share Statistics
EPS (TTM)0.90
Shares Outstanding25,492,014
10 Day Avg. Volume113,886
30 Day Avg. Volume125,806
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue1.22
Enterprise Value/Gross Profit7.48
Enterprise Value/Ebitda6.70
Forecast
1Y Price Target
$34.00Price Target Upside4.62% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
United Fire Group Business Overview & Revenue Model
Company DescriptionUnited Fire Group, Inc., together with its subsidiaries, provides property and casualty insurance for individuals and businesses in the United States. The company offers commercial and personal lines of property and casualty insurance; and commercial multiple peril and inland marine insurance, as well as assumed reinsurance products. Its commercial policies include fire and allied lines, other liability, automobile, workers' compensation, and fidelity and surety coverage; and personal lines comprise automobile, and fire and allied lines coverage, including homeowners. The company sells its products through a network of independent agencies. United Fire Group, Inc. was founded in 1946 and is headquartered in Cedar Rapids, Iowa.
How the Company Makes MoneyUnited Fire Group generates revenue primarily through the collection of premiums from its insurance policies. The company underwrites various types of insurance, and the premiums collected from policyholders constitute the main revenue stream. Additionally, UFCS earns investment income by investing the premiums it receives prior to claims being paid out. This investment income can be a significant contributor to overall earnings. The company may also engage in reinsurance arrangements to mitigate risk, which can affect its financial performance. Key partnerships with independent agents and brokers facilitate the distribution of its insurance products, enhancing its market reach and customer base.
United Fire Group Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong financial performance with record net written premiums, improved underwriting profit, and increased investment income. However, there were some challenges noted in terms of rate achievement moderation and volatility in certain investments.Q2-2025 Updates
Positive Updates
Record Net Written Premium
UFG delivered record net written premium of $373 million in the second quarter, with a 14% growth driven by improved retention, record new business production, and rate increases.
Improved Underwriting Profit
The second quarter saw the highest underwriting profit in over a decade, with a combined ratio improving by 9.2 points to 96.4%.
Investment Income Growth
Net investment income increased by 20% from the prior year, driven by sustainable improvement in fixed maturity income.
Improved Expense Ratio
The underwriting expense ratio improved by over 0.5 points to 34.9% in the quarter, reflecting benefits from strategic investments and growth.
Strong Retention and New Business Production
Retention improved by nearly 5 points to 86%, with new business production surpassing $100 million for the first time.
Negative Updates
Moderation in Rate Achievement
Second quarter rate achievement of 7.6% moderated somewhat from the first quarter, particularly in commercial property.
Volatility in Limited Partnership Investments
Investments in limited partnerships generated a positive but lower return, with increased risk of volatility in the current market.
Challenging Reinsurance Market
The reinsurance business has seen softer pricing, leading to the non-renewal of some treaties that did not meet profitability expectations.
Company Guidance
During the UFG Insurance Second Quarter of 2025 Financial Results Conference Call, the company reported a record net written premium of $373 million, reflecting a 14% growth driven by improved retention, record new business production, and rate increases exceeding loss trends. The combined ratio improved by 9.2 points to 96.4%, with an underlying loss ratio improvement of 1.3 points to 57.6%. The catastrophe loss ratio was notably low at 5.5%, below both historical averages and the quarterly expectation of 8.9%. Net investment income increased by 20%, contributing to a 10% return on equity through the first half of the year. The underwriting expense ratio improved slightly to 34.9%, aided by strategic investments in talent and technology. Additionally, UFG recognized a $5 million favorable prior year reserve development following their annual review of loss adjustment expenses. The company also achieved a non-GAAP adjusted operating income of $0.90 per diluted share, with an improvement in book value per common share to $33.18.United Fire Group Financial Statement Overview
Summary
United Fire Group demonstrates strong revenue growth and cash flow generation, with a solid balance sheet showing no debt. Despite operational challenges in EBIT and EBITDA, profitability and cash position improvements indicate resilient financial performance.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 | 716.98M | 86.48M | 1.10B | 980.29M | 1.07B | 1.07B |
| Gross Profit | 116.86M | 79.20M | 1.10B | 980.29M | 1.07B | 1.07B |
| EBITDA | 130.60M | 84.31M | -25.95M | 22.93M | 106.60M | -162.73M |
| Net Income | 91.84M | 61.96M | -29.70M | 15.03M | 80.59M | -112.71M |
Balance Sheet | ||||||
| Total Assets | 3.66B | 3.49B | 3.14B | 2.88B | 3.01B | 3.07B |
| Cash, Cash Equivalents and Short-Term Investments | 202.40M | 201.05M | 102.15M | 96.92M | 132.38M | 88.12M |
| Total Debt | 0.00 | 117.06M | 50.00M | 50.00M | 50.00M | 50.00M |
| Total Liabilities | 2.82B | 2.71B | 2.41B | 2.14B | 2.13B | 2.24B |
| Stockholders Equity | 845.67M | 781.53M | 733.75M | 740.11M | 879.12M | 825.15M |
Cash Flow | ||||||
| Free Cash Flow | 291.61M | 328.43M | 160.85M | -3.39M | 15.94M | 22.57M |
| Operating Cash Flow | 301.88M | 340.30M | 171.74M | -1.25M | 29.92M | 41.44M |
| Investing Cash Flow | -236.39M | -292.49M | -149.89M | -19.17M | 31.73M | -92.87M |
| Financing Cash Flow | -16.77M | 51.09M | -16.45M | -15.03M | -17.49M | 18.66M |
United Fire Group Technical Analysis
Positive
32.50
Price Trends
29.34
Positive
28.65
Positive
28.00
Positive
Market Momentum
0.65
Positive
64.54
Neutral
67.80
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 32.5 is above the 20-day moving average (MA) of 31.23, above the 50-day MA of 29.34, and above the 200-day MA of 28.00, indicating a bullish trend. The MACD of 0.65 indicates Positive momentum. The RSI at 64.54 is Neutral, neither overbought nor oversold. The STOCH value of 67.80 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 (68)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | 771.41M | 7.34 | 21.16% | ― | 9.35% | 77.04% | |
79 Outperform | $807.33M | 8.85 | 11.68% | 2.01% | 14.28% | 148.61% | |
72 Outperform | 716.46M | 11.08 | 15.79% | 2.99% | 5.64% | -17.95% | |
70 Outperform | 542.76M | 6.75 | 32.13% | ― | 23.68% | 16.14% | |
69 Neutral | 683.42M | 8.04 | 9.32% | 3.64% | 3.40% | 978.24% | |
66 Neutral | 424.96M | 15.01 | 6.27% | 4.69% | -3.71% | -21.68% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% |
* Financial Sector Average
Performance Comparison
UFCS
United Fire Group
32.50
11.76
56.70%
DGICA
Donegal Group
19.51
4.95
34.00%
GBLI
Global Indemnity
29.86
-1.34
-4.29%
UVE
Universal Insurance Holdings
25.71
3.99
18.37%
ACIC
American Coastal Insurance
11.14
0.05
0.45%
HRTG
Heritage Insurance Holdings
25.43
9.27
57.36%
United Fire Group Corporate Events
Executive/Board Changes
United Fire Group Approves Severance Agreement for Executive
Neutral
Aug 29, 2025
On August 15, 2025, United Fire Group‘s Board of Directors approved a Change in Control Severance Agreement for SVP & Chief Human Resources Officer, Steven D. Hernandez. Effective August 28, 2025, the agreement includes provisions such as an 18-month non-competition clause, severance benefits, continued insurance, full vesting of long-term incentives, and outplacement services, enhancing the executive’s security in the event of a company control change.
Executive/Board Changes
United Fire Group Appoints Gilda L. Spencer as Director
Positive
Aug 19, 2025
On August 15, 2025, United Fire Group, Inc. announced the appointment of Gilda L. Spencer as a Class A director, effective immediately. Spencer, with her extensive legal and insurance background, will serve on the board’s risk management and compensation and human capital committees, bringing valuable insights to the company’s regulatory and governance strategies. Her appointment is expected to enhance UFG’s board capabilities and contribute to the company’s long-term success.
Dividends
United Fire Group Announces Quarterly Dividend
Positive
Aug 15, 2025
On August 15, 2025, United Fire Group, Inc. (UFG) announced a quarterly cash dividend of $0.16 per share, payable on September 12, 2025, to shareholders of record as of August 29, 2025. This marks the 230th consecutive quarterly dividend since March 1968, highlighting UFG’s consistent financial performance and commitment to returning value to its shareholders.
Financial Disclosures
United Fire Group to Announce Q2 2025 Earnings
Neutral
Jul 23, 2025
United Fire Group, Inc. announced that it will release its second quarter 2025 earnings results after the market closes on August 5, 2025. An earnings call is scheduled for August 6, 2025, providing an opportunity for stakeholders to hear management discuss the results, which could impact the company’s market positioning and stakeholder interests.
Private Placements and Financing
United Fire Group Completes $30 Million Note Placement
Positive
Jul 10, 2025
On July 10, 2025, United Fire Group, Inc. announced the successful completion of a $30 million private placement of senior unsecured 9.0% Series B notes due May 31, 2039. The proceeds from this offering, led by Ares Alternative Credit funds, will be used to support the company’s anticipated growth and general corporate purposes, enhancing its financial position in the insurance industry.
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.