NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and notable return on equity. 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 current debt-to-equity ratio, 0.36, is low and is below the industry average, implying that there has been successful management of debt levels.
- 41.20% is the gross profit margin for UNIVERSAL INSURANCE HLDGS which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 2.00% trails the industry average.
- UNIVERSAL INSURANCE HLDGS has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, UNIVERSAL INSURANCE HLDGS increased its bottom line by earning $0.91 versus $0.71 in the prior year.
- The revenue fell significantly faster than the industry average of 5.0%. Since the same quarter one year prior, revenues fell by 29.5%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
Universal Insurance Holdings, Inc., through its subsidiaries, operates as an insurance company in the United States. The company primarily offers homeowners' insurance; and covers various aspects of insurance underwriting, distribution, and claims processing. The company has a P/E ratio of 5.8, equal to the average insurance industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Universal has a market cap of $155.2 million and is part of the
industry. Shares are up 17% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet RatingsStaff