Does Universal Insurance Holdings Inc’s (NYSE:UVE) Recent Track Record Look Strong?
Examining Universal Insurance Holdings Inc’s (NYSE:UVE) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess UVE’s latest performance announced on 31 March 2018 and weigh these figures against its longer term trend and industry movements. View our latest analysis for Universal Insurance Holdings
Could UVE beat the long-term trend and outperform its industry?
For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to assess many different companies in a uniform manner using the most relevant data points. For Universal Insurance Holdings, its most recent bottom-line (trailing twelve month) is US$115.78M, which, in comparison to the previous year’s level, has grown by a somewhat soft 9.88%. Given that these figures are fairly short-term thinking, I have calculated an annualized five-year figure for UVE’s earnings, which stands at US$69.58M This means generally, Universal Insurance Holdings has been able to gradually grow its net income over the last few years as well.
What’s the driver of this growth? Let’s see whether it is only a result of industry tailwinds, or if Universal Insurance Holdings has experienced some company-specific growth. Over the past few years, Universal Insurance Holdings expanded its bottom line faster than revenue by efficiently controlling its costs. This has caused a margin expansion and profitability over time. Scanning growth from a sector-level, the US insurance industry has been growing, albeit, at a unexciting single-digit rate of 4.29% over the prior twelve months, and 7.99% over the past five years. This shows that whatever recent headwind the industry is experiencing, Universal Insurance Holdings is relatively better-cushioned than its peers.
What does this mean?
Though Universal Insurance Holdings’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Universal Insurance Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Universal Insurance Holdings to get a more holistic view of the stock by looking at:
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.
Financial Health: Is UVE’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
