Safety Insurance Group (SAFT) is back in focus after its full year 2025 results, with higher revenue, net income, earnings per share and an improved combined ratio, which together indicate stronger underwriting and policy activity.
See our latest analysis for Safety Insurance Group.
The full year 2025 results and ongoing buybacks have come alongside fairly steady trading, with a recent 1 day share price return of 0.82% and a 1 year total shareholder return of 5.95%. This suggests that momentum is modest rather than surging in either direction.
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With earnings per share at US$6.70, book value per share higher and the stock at US$76.32 after steady but unspectacular returns, is Safety Insurance quietly undervalued or are markets already pricing in its future growth?
Preferred P/E of 11.2x: Is it justified?
Safety Insurance Group is trading on a P/E of 11.2x at a last close of $76.32. This sits below both industry and peer benchmarks and points to a comparatively restrained valuation for its earnings profile.
The P/E multiple tells you how much investors are currently paying for each dollar of earnings, which is especially relevant for an insurer where profit quality and consistency matter. With earnings of US$99.71m on revenue of US$1.26b and high quality earnings flagged, this kind of earnings based lens is a straightforward way to compare Safety Insurance Group with both the broader US market and insurance specific peers.
Against the US insurance industry average P/E of 11.9x, Safety Insurance Group trades at a discount. The gap is even wider versus its peer group average of 21.2x. At the same time, its 11.2x P/E is also below the wider US market multiple of 19.3x. This indicates the stock is priced more conservatively than many peers despite 40.3% earnings growth over the past year and improved net profit margins from 6.3% to 7.9%.
See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-earnings of 11.2x (UNDERVALUED)
However, the relatively small 1 year total return of 5.95% and the recent 30 day share price decline of 3.44% suggest that sentiment could turn quickly if results disappoint.
Find out about the key risks to this Safety Insurance Group narrative.
Another view using our DCF model
The P/E suggests Safety Insurance Group could be on the cheaper side, but our DCF model points the other way. With the share price at $76.32 and an estimated future cash flow value of $44.71, the stock screens as overvalued on this method. So which signal would you lean on?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Safety Insurance Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 47 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
If this mix of positives and watchpoints feels balanced rather than clear cut, it is worth checking the underlying data now and forming your own stance. You can start with 3 key rewards and 1 important warning sign.
Ready for more investment ideas?
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- Target potential value opportunities by scanning our list of 47 high quality undervalued stocks that pair solid fundamentals with restrained pricing.
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- Prioritise capital protection by checking 77 resilient stocks with low risk scores, built around businesses with more stable risk profiles.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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