RLI Corp (RLI) stock analysis

P/E below its 5-year median

RLI's P/E of 16.0 is below its own 5-year median of 18.3.

P/E above the industry

RLI's P/E of 16.0 is above the Fire, Marine, and Casualty Insurance median of 10.4.

P/S above the industry

RLI's price-to-sales of 3.24 is above the Fire, Marine, and Casualty Insurance median of 1.28.

P/B above the industry

RLI's price-to-book of 3.72 is above the Fire, Marine, and Casualty Insurance median of 1.62.

Trading above fair value

The share price of $68.70 is above our fair value estimate of $58.49.

Margin of safety under 20%

The price is 17.5% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 3.5% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -11.8% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 11.9% over the last twelve months, against a 5-year average of 20.8% a year.

Growing slower than the industry

Revenue grew 4.6% over the last twelve months; the Fire, Marine, and Casualty Insurance median is 5.0%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

Banks and insurers do not report gross profit.

Return on equity over 15%

Return on equity was 22.1% over the last twelve months and averaged 28.7% over five years.

Return on assets over 1%

Return on assets was 6.2%; for a bank or insurer, 1% or more is considered good.

Return on equity above the industry

RLI's return on equity of 22.1% is above the Fire, Marine, and Casualty Insurance median of 15.9%.

Earnings grew over 5 years

Net income grew 20.8% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 20.3% over the last twelve months, against a 5-year average of 23.8%.

Net margin above the industry

RLI's net margin of 20.3% is above the Fire, Marine, and Casualty Insurance median of 12.0%.

Debt level

Needs debt and equity figures.

Debt trend

Needs a balance sheet from five years ago with positive equity.

Debt coverage

Needs operating cash flow.

Interest coverage

Interest expense is not reported separately.

Short-term liquidity

Insurers do not split assets into current and non-current.

Bankruptcy risk (Altman Z)

The Altman model does not apply to insurers.

Pays a dividend

RLI paid dividends worth 6.8% of the share price over the last twelve months.

Yield above Treasuries

The 6.8% yield is above the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; RLI yields 6.8%.

Dividend was cut

The dividend per share fell by more than 10% at least once in the last 10 fiscal years.

Not covered by earnings

Dividends take 109% of net income, leaving little room.

Covered by free cash flow

Dividends take 80.9% of free cash flow.