SIGI Stock – A Comprehensive Market Inference Overview

Selective Insurance logged a -7.0% change during today's afternoon session, and is now trading at a price of $97.47 per share.

Selective Insurance returned gains of 10.7% last year, with its stock price reaching a high of $108.18 and a low of $88.6. Over the same period, the stock underperformed the S&P 500 index by -5.2%. The company's 50-day average price was $102.06. Selective Insurance Group, Inc., together with its subsidiaries, provides insurance products and services in the United States. The mid-cap Finance company is based in Branchville, NJ. Selective Insurance has not offered a dividend during the last year.

Generally Positive Cash Flows With an Upwards Trend:

2018 2019 2020 2021 2022 2023
Revenue (MM) $2,586 $2,846 $2,922 $3,379 $3,558 $4,074
Revenue Growth n/a 10.07% 2.66% 15.63% 5.29% 14.49%
Interest Income (MM) $24 $34 $31 $29 $29 $29
Operating Margins 8% 12% 10% 15% 8% 10%
Net Margins 7% 10% 8% 12% 6% 8%
Net Income (MM) $179 $272 $246 $404 $225 $327
Depreciation & Amort. (MM) $45 $55 $59 $55 $42 $31
Earnings Per Share $3.0 $4.53 $4.09 $6.5 $3.54 $5.2
EPS Growth n/a 51.0% -9.71% 58.92% -45.54% 46.89%
Diluted Shares (MM) 60 60 60 61 61 61
Free Cash Flow (MM) $19 $454 $532 $749 $776 $820
Capital Expenditures (MM) $436 $23 $22 $22 $26 $19

Selective Insurance has generally positive cash flows and rapidly growing revenues and decreasing reinvestment in the business. Additionally, the company's financial statements display strong operating margins with a stable trend and positive EPS growth.

Selective Insurance's Valuation Is in Line With Its Sector Averages:

Selective Insurance has a trailing twelve month P/E ratio of 19.6, compared to an average of 12.38 for the Finance sector. Based on its EPS guidance of $8.54, the company has a forward P/E ratio of 12.0. According to the 16.1% compound average growth rate of Selective Insurance's historical and projected earnings per share, the company's PEG ratio is 1.22. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 9.8%. On this basis, the company's PEG ratio is 2.01. This suggests that these shares are overvalued. Furthermore, Selective Insurance is likely overvalued compared to the book value of its equity, since its P/B ratio of 2.16 is higher than the sector average of 1.58. The company's shares are currently trading 36.9% above their Graham number.

There's an Analyst Consensus of Some Upside Potential for Selective Insurance:

The 7 analysts following Selective Insurance have set target prices ranging from $93.0 to $120.0 per share, for an average of $107.14 with a hold rating. The company is trading -9.0% away from its average target price, indicating that there is an analyst consensus of some upside potential.

Selective Insurance has an average amount of shares sold short because 2.2% of the company's shares are sold short. Institutions own 85.8% of the company's shares, and the insider ownership rate stands at 1.75%, suggesting a small amount of insider investors. The largest shareholder is Blackrock Inc., whose 12% stake in the company is worth $717,440,225.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.