United Fire Group Upgraded to Strong Buy


On Aug 23, Zacks Investment Research upgraded United Fire Group, Inc. (UFCS) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

United Fire Group has witnessed rising earnings estimates on the back of strong second-quarter 2013 results. Moreover, this property and casualty insurer delivered positive earnings surprises in 3 of the last 4 quarters with an average beat of 43.0%. The long-term expected earnings growth rate for this stock is 10.0%.    

United Fire Group reported second-quarter results on Aug 6. Non-GAAP earnings per share came in at 25 cents, surpassing the Zacks Consensus Estimate by 100%. Higher premiums written by the property and casualty segment and new business volume growth mainly led to the upside. Results were however 10.7% down year over year.

Total revenue of United Fire increased 10.1% year over year to $219.7 million in the second quarter, driven mainly by an improvement in net premiums earned. It also surpassed the Zacks Consensus Estimate of $216 million.

Net written premiums in the quarter increased 9.1% year over year to $214.2 million.

The company experienced rate increases with slight increase in policy retention. United Fire Group expects to achieve mid to upper single digit rate increases for the rest of the year.

The Zacks Consensus Estimate for 2013 increased 22.9% to $2.15 per share over the last 30 days. For 2014, the Zacks Consensus Estimate moved north by 6.9% to $2.31 per share.

Other Stocks to Consider

Property and casualty insurers Everest Re Group Ltd. (RE), Global Indemnity plc (GBLI), and HCI Group, Inc. (HCI) with Zacks Rank #1 are also performing well and are worth considering.

Read the Full Research Report on RE

Read the Full Research Report on UFCS

Read the Full Research Report on GBLI

Read the Full Research Report on HCI

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