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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Safety Insurance Group, Inc. (XNAS:SAFT) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SAFT
Name:
SAFETY INSURANCE GROUP, INC. (XNAS:SAFT)
Sector:
- 15967.00K
Industry:
Insurance�Property & Casualty
CEO:
Mr. George Murphy
Total Employees:
552
Our Technological Advancement Rating
Our Rating:
-
-
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SAFETY INSURANCE GROUP, INC.(SAFT) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INSURANCE�PROPERTY & CASUALTY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
89.24
One Month Price Target:
$89.34
Six Month Price Target :
$89.83
Likely Price in One Year's Time:
Ticker:
$90.42
Likely Trading Range Today Under (Normal Volatility)
$88.96
Price Upper limit ($) :
$89.54
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$85.7
This week:
$81.33
This month :
$73.41
Other Primary facts
Market Cap:
1.29B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
14.74M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
11.95%
-9.54%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$105.67
$98.18
$72.81
$80.30
Medium risk (<10%) entry points
Buy Call
Sell Call
$95.75
Buy Put:
Sell Put:
$94.15
$82.71
$84.33
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SAFT
Sharpe Ratio:
0.04%
Comparison:
SAFT, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -97.42% lower than the industry
& is -98.44% lower than the market/S&P 500 average
Average Returns/Yield of
SAFT
Daily returns:
0.01%
Weekly returns:
0.05%
Monthly returns:
0.19%
Yearly returns:
10.43%
Comparison of returns:
Average annual returns/yield (last 3 years) is -78.04% below industry average
Classification:
SAFT, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.16
Statistical test of Returns:
SAFT has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.94%
Weekly Volatility:
4.33%
Monthly Volatility:
8.66%
Yearly Volatility:
29.99%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.93%
Volatility in last five trading days has been -52.11% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.97%
Weekly VaR:
-8.87%
Monthly VaR:
-17.74%
How Much Can the price of
SAFT
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-16%
Worst case (decline):
-61.44%
This translates to price declining to:
$75.34
This translates to price declining to:
$34.41
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
SAFT is a 25.17% riskier investment compared to the market/S&P 500 & is 7.24% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -19.61% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SAFT
Beta in relation to market/S&P 500--0.20
Expected beta in 1 year's time:
0.409
Expected beta in 3 year's time:
0.579
Unlevered (debt free) Beta:
0.192
Beta in relation to Nasdaq (XNAS):
0.408
Beta in relation to all global stocks::
0.653
Beta Comparison & Analysis
Beta of competitors/peers::
0.862
Beta is -77.15% lower than peers
Average Industry Beta:
0.555
Beta is -64.51% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
10.78%
Sustainable growth rate is -6.44% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.022
Alpha is -163.64% below industry average alpha yield
Alpha is -141% below the market average
Analysis of Cost of Capital of
SAFT
Equity cost of capital:
0.045
Equity cost of capital is -35.28% below industry mean WACC
Unlevered (without debt) cost of capital:
4.39%
Before-tax cost of debt:
0.92%
After-tax cost of debt:
0.73%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
0.73%
WACC is -33.49% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$56.95
Revenue growth rate per share of (3Y):
1.53
Annual revenue growth rate is -94.45% below industry average
EPS:
$6.88
Expected Annual growth rate of EPS (3Y):
10.51%
Expected future EPS growth rate is -32.70% lower than the Insurance�Property & Casualty industry
Free cash flow (FCF) per share:
$7.18
Balance sheet equity growth per share: 11.37%
Equity growth rate per share is -74.87% lower than the industry
Debt per share
$1.80
EBITDA per share
$9.25
Valuation Analysis Today of
SAFT
P/E Ratio:
18.15
P/E Ratio of Competitors/Peers:
11.21
P/E ratio is 61.92% higher than main peers & is 3.73% higher than the industry
Stock price/value with industry average P/E ratio: $120.38
SAFT is -25.87% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $107.98
Present value of the expected future dividends only: $80.01
P/S (Price to Sales ratio):
1.57
Price to sales ratio is -34.67% below the industry mean
P/B (Price to book value ratio):
1.53
Price to free cash flow: 12.44
-
Net income growth rate (3Y):
58.14%
Net income growth rate is -299.20% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 13.30%
Dividend yeild: 4.03%
Previous Dividend: $0.90
Previous adjusted dividend: $0.90
Previous Dividend: $3.60
-
-
Average dividend payment (long-term): $0.90
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 13/09/2022
Expected next dividend record date: 30/08/2022
-
Previous dividend payment date: 15/06/2022
Previous dividend record date: 06/01/2022
-
Dividend History:
2022-05-31--$0.90
2021-11-30--$0.90
2021-05-28--$0.90
2022-02-28--$0.90
2021-08-31--$0.90
2021-03-04--$0.90
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
3.08%
Net debt to equity ratio:
2.47%
Debt to assets ratio:
1.33%
Net debt to assets ratio:
1.07%
Debt-to-asset ratio is -98.00% below industry average
Ability to repay debt:
Interest coverage ratio:
261.23
Interest coverage ratio is 5324.84% more than industry average
Looking forward:
Debt growth rate:
-4.81%
Annual debt growth is 114% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.521
Statistical significance of correlation:
SAFT has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.6
Stock price is -13.19% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.6
Correlation of price movement with Nasdaq (^IXIC):
0.035
Covariance of price movement with the market:
0.04
Kurtosis
6.019
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.129
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
SAFT
Gross Profit Margin Ratio:
-
Operating Profit Margin Ratio:
12.62%
Operating profit margin is -299.42% lower than the industry
Net Profit Margin Ratio:
-
Effective Tax Rate:
20.72%
Effective tax rate is 3.66% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
11.88%
Return on equity (ROE) is 45.89% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
5.14%
Return on assets (ROA) is 235.55% higher than the industry
Financial Leverage:
1.0x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 9.9 years
Stock based compensation to net income ratio:
2.03%
In-depth Efficiency Analysis
Revenue generated per employee:
1.5M
Each employee generates 27% more revenue than industry average revenue per employee
EBITDA generated per employee:
247.0K
Each employee generates 23% more EBITDA than industry average revenue per employee
Profit generated per employee:
185.5K
Each employee generates 31% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 28.9K
Each employee generates -148% less free cash flow than industry average revenue per employee
Assets/Capital per employee
0.0K
Each employee generates -148% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
SAFT
MERCHANTS BANCORP (XNAS:MBIN)
FIRST BANCORP (XNAS:FBNC)
StepStone Group Inc (XNAS:STEP)
CITY HOLDING COMPANY (XNAS:CHCO)
OCEANFIRST FINANCIAL CORP. (XNAS:OCFC)
AMERISAFE, INC (XNAS:AMSF)
BROOKLINE BANCORP, INC. (XNAS:BRKL)
ENCORE CAPITAL GROUP, INC. (XNAS:ECPG)
S & T BANCORP, INC. (XNAS:STBA)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�4%
Sell�0%
Strong sell�4%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
839.45M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
-
-
-
-
-
-
-
42.11M
522.00K
6.72M
136.36M
105.92M
102.37M
129.12M
26.75M
102.37M
Statement of Cash Flow
Date:
Period:
1.70M
Differed Income Tax :
2.31M
Stock Based Compensation :
2.08M
Change in Working Capital :
- 39712.00K
Accounts Receivables:
13.42M
Other Working Capital:
- 3017.00K
Other Non-Cash Items:
10.50M
Net Cash Provided by Operating Activities:
- 15276.00K
Investments in PP&E:
- 691.00K
Net Acquisitions:
-
Purchases of Investments:
- 84970.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
35.23M
1.14B
1.17B
278.74M
-
-
-
26.53M
-
-
1.39B
-
-
-
1.99B
1.99B
53.90M
30.00M
-
-
-
83.90M
26.53M
-
31.49M
1.08B
1.13B
179.00K
816.34M
- 22778.0K
-
March 31, 2022 at 6:00:00 AM
710.33M
861.89M
1.99B
2.53B
56.53M
21.3M
100.79M
-
15.12M
-
-
- 14603.00K
- 13617.00K
-
- 28220.00K
-
- 28372.00K
35.23M
63.60M
- 15276.00K
- 691.00K
- 15967.00K
Our Proprietary Portfolio Rating
Our Rating:
-
Price Forecast/Expected Price in Next 5 Years of
SAFT
2023
2024
2025
2026
2027
$112.32
$113.80
$115.31
$116.84
$118.38