Selective Insurance Group Stock Upgraded (SIGI)
NEW YORK (
)
(Nasdaq:
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 7.0%. Since the same quarter one year prior, revenues slightly increased by 4.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- SIGI's debt-to-equity ratio is very low at 0.28 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- After a year of stock price fluctuations, the net result is that SIGI's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- SELECTIVE INS GROUP INC's earnings per share declined by 32.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, SELECTIVE INS GROUP INC reported lower earnings of $0.36 versus $1.27 in the prior year. This year, the market expects an improvement in earnings ($1.50 versus $0.36).
Selective Insurance Group, Inc., through its subsidiaries, primarily engages in providing property and casualty insurance products and services in the eastern and midwestern regions of the United States. The company operates in two segments, Insurance Operations and Investments. The company has a P/E ratio of 35.7, below the average insurance industry P/E ratio of 36.5 and above the S&P 500 P/E ratio of 17.7. Selective Insurance Group has a market cap of $969.5 million and is part of the
sector and
industry. Shares are up 2.7% year to date as of the close of trading on Friday.
You can view the full
Selective Insurance Group Ratings Report
or get investment ideas from our
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