Recent performance snapshot for HCI Group stock
Without a specific news announcement driving the move, HCI Group (HCI) has been trading with mixed returns recently, including a 3.3% decline over the past week and a small gain over the past month.
See our latest analysis for HCI Group.
That recent 1-week share price return of negative 5.7% sits against a year-to-date share price return of negative 10.9%. At the same time, the 1-year total shareholder return of 23.7% and 3-year total shareholder return above 200% suggest that longer term momentum has been much stronger.
If HCI Group’s move has you thinking about where else capital could work hard, it might be a good moment to scan our 19 top founder-led companies for fresh ideas beyond insurance.
With HCI Group trading at $163.87 versus an analyst price target of $245 and an estimated intrinsic discount of about 77%, you have to ask: is this an undervalued insurer, or is the market already factoring in expectations for future growth?
Most Popular Narrative: 18.1% Overvalued
According to the most followed narrative, HCI Group’s fair value sits at $138.75, which is below the last close of $163.87, setting up a more cautious valuation story.
Dividend of US$0.40 is the same as last year.
• Ex-date: 16th August 2024
• Payment date: 20th September 2024
• Dividend yield will be 1.8%, which is about the same as the industry average.
Sustainability & Growth
• Dividend is well covered by both earnings (13% earnings payout ratio) and cash flows (5% cash payout ratio).
• The dividend has increased by an average of 4.8% per year over the past 10 years and has been stable with no material reductions to payments, indicating a long track record of dividend growth and stability.
Curious how a stock with this dividend track record still screens above fair value? According to BenFranklin1776, the real driver sits in the earnings path and the profit margin profile that feeds into the future multiple behind that $138.75 figure. Want to see which assumptions actually move the fair value line?
Result: Fair Value of $138.75 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, this story could shift if revenue growth of 8.6% slows meaningfully, or if the recent 9.4% net income decline points to persistent margin pressure.
Find out about the key risks to this HCI Group narrative.
Another view on HCI Group’s valuation
The user narrative pegs fair value at $138.75, yet HCI Group trades on a P/E of 7.7x versus a fair ratio of 8.9x, the US Insurance industry at 11.6x and peers at 10.6x. That gap points to cheaper earnings, but it is unclear whether this represents a cushion or a warning sign.
See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
With mixed signals like these, it comes down to how you weigh the trade off between risk and reward, so move quickly, review the data and let our breakdown of 3 key rewards and 2 important warning signs help you sharpen your own view.
Looking for more investment ideas?
If HCI Group has sharpened your thinking, do not stop there. Use our screeners to spot other opportunities that could fit your goals just as well.
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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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