United Insurance Holdings Corp. – Value Analysis (NASDAQ:UIHC) : September 26, 2017

Capitalcube gives United Insurance Holdings Corp. a score of 46.

Our analysis is based on comparing United Insurance Holdings Corp. with the following peers – State Auto Financial Corporation, HCI Group, Inc., Heritage Insurance Holdings, Inc., Allstate Corporation, Federated National Holding Company, Universal Insurance Holdings, Inc., National Security Group Inc and Kingstone Companies, Inc. (STFC-US, HCI-US, HRTG-US, ALL-US, FNHC-US, UVE-US, NSEC-US and KINS-US).

Fundamental Overview

United Insurance Holdings Corp. has a fundamental score of 46 and has a relative valuation of OVERVALUED.

Fundamental Score

Company Overview

  • It’s current Price/Book of 1.30 is about median in its peer group.
  • The market expects faster earnings growth from UIHC-US than from its peers and also a turnaround in its current ROE.
  • UIHC-US has relatively low profit margins and median capital efficiency.
  • Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues.
  • Over the last five years, UIHC-US‘s return on equity has declined from about median to less than the median among its peers suggesting that the company’s historical competitiveness in operations is slipping away.
  • While UIHC-US‘s revenues growth has been around the peer median in recent years, the market seems to see faster growth ahead and gives its shares a higher than peer median P/E ratio.
  • The company is likely overinvesting in a business with only median returns.
  • UIHC-US has some amount of debt capacity available.

Drivers of Margin

  • Relatively low pre-tax margin suggests less control on operating costs versus peers.
  • The company’s underwriting margin (i.e. premiums earned minus insurance losses, expressed as a percentage of premiums earned) of 36.69% is around peer median suggesting that UIHC-US does not benefit from either a differentiated strategy with pricing advantages and/or a disciplined strategy in writing policies versus peers. In addition, UIHC-US‘s pre-tax margin is less than the peer median (1.08% compared to 8.61%) suggesting relatively high operating costs.
Drivers of Margins

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Differentiated; High Cost, Commodity; High Cost, Commodity; Low Cost

Company Profile

United Insurance Holdings Corp. engages in the homeowners property and casualty insurance business, through wholly-owned insurance subsidiaries. It offers policies for exposures, which includes coverage options for standard single-family homeowners, tenants (renters), and condominium unit owners. The company was founded in May 2007 and is headquartered in St. Petersburg, FL.