On Jan 2, United Insurance Holdings Corp. (UIHC) reached a new 52-week high of $22.44 per share, driven by inorganic growth. With about 0.4 million shares exchanging hands on Friday, the stock closed at $21.17.
The one-year return from the stock came in at 60.5%, ahead of Nasdaq’s return of 14.4% as well as other insurers like AXIS Capital Holdings Ltd. (AXS), RenaissanceRe Holdings Ltd. (RNR) and Aspen Insurance Holdings Ltd. (AHL) with one year returns of 8.3%, 5.6% and 7%, respectively.
Last month, United Insurance agreed to acquire Family Security Holdings, LLC and its wholly owned subsidiaries Family Security Insurance Company and Family Security Underwriters, LLC. With this acquisition the company not only strengthened its presence in Louisiana but also entered the Hawaii homeowners’ market.
Additionally, on Oct 15, United Property & Casualty Insurance Company — one of the wholly owned subsidiaries of United Insurance — announced that it intends to assume more than 37,000 personal and commercial residential policies from Citizens Property Insurance Corporation, thereby resulting in an improvement in the book of business.
Policies were already assumed in November and represented about $74 million in-force premiums. Policies approval plays an important role in driving top-line growth. Moreover, the company was recently approved to write property and casualty insurance in six additional states: Connecticut, Delaware, Louisiana, Maryland, Mississippi and Virginia.
With these additions, United Insurance now writes insurance in fifteen states. The latest approval is expected to further augment the company’s premiums, thereby improving revenue generation.
The company has always stayed focused on enhancing shareholder value. As such last year, the board of directors approved a 33% hike in its dividend. The new payout of 4 cents yields 0.76%.
With respect to earnings performance, this Zacks Rank #2 (Buy) stock has been delivering positive surprises in the trailing quarters with an average beat of 45.41%. Going forward, we expect the momentum to continue based on higher net premiums earned.
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