Universal Insurance Holdings, Inc. (NYSE:UVE) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of UVE, it is a financially-robust company with a strong track record superior dividend payments, trading at a discount. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Universal Insurance Holdings here.
Undervalued with excellent balance sheet and pays a dividend
UVE’s debt-to-equity ratio stands at 6.4%, which means its debt level is acceptable. This means that UVE’s capital structure strikes a good balance between low-cost debt funding and maintaining financial flexibility without overly restrictive terms of debt. UVE seems to have put its debt to good use, generating operating cash levels of 3.53x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows. UVE is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts' consensus forecast growth be correct. Also, relative to the rest of its peers with similar levels of earnings, UVE's share price is trading below the group's average. This supports the theory that UVE is potentially underpriced.
For those seeking income streams from their portfolio, UVE is a robust dividend payer as well. Over the past decade, the company has consistently increased its dividend payout, reaching a yield of 2.7%.
For Universal Insurance Holdings, I've compiled three key aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for UVE’s future growth? Take a look at our free research report of analyst consensus for UVE’s outlook.
- Historical Performance: What has UVE's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of UVE? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.