Stewart Information Services Corp (STC) stock analysis

P/E below its 5-year median

Stewart Information Services's P/E of 11.1 is below its own 5-year median of 18.0.

P/E below the industry

Stewart Information Services's P/E of 11.1 is below the Insurance Carriers median of 11.2.

P/S below the industry

Stewart Information Services's price-to-sales of 0.40 is below the Insurance Carriers median of 1.16.

P/B below the industry

Stewart Information Services's price-to-book of 0.80 is below the Insurance Carriers median of 1.57.

Trading below fair value

The share price of $44.12 is below our fair value estimate of $67.76.

Margin of safety over 20%

The price is 34.9% below fair value, more than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew -1.6% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -12.0% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 18.4% over the last twelve months, against a 5-year average of -5.7% a year.

Growing faster than the industry

Revenue grew 20.5% over the last twelve months; the Insurance Carriers median is 6.5%.

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 under 15%

Return on equity was 7.7% over the last twelve months and averaged 11.1% over five years; we look for 15% on both.

Return on assets over 1%

Return on assets was 3.9%; for a bank or insurer, 1% or more is considered good.

Return on equity below the industry

Stewart Information Services's return on equity of 7.7% is below the Insurance Carriers median of 14.0%.

Earnings shrank over 5 years

Net income shrank 5.7% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 3.6% over the last twelve months, against a 5-year average of 4.7%.

Net margin below the industry

Stewart Information Services's net margin of 3.6% is below the Insurance Carriers median of 10.6%.

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

Stewart Information Services paid dividends worth 4.8% of the share price over the last twelve months.

Yield above Treasuries

The 4.8% 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; Stewart Information Services yields 4.8%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 54.3% of net income.

Covered by free cash flow

Dividends take 64.2% of free cash flow.