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Strength Seen in United Fire (UFCS): Can Its 5.4% Jump Turn into More Strength?

Zacks Equity Research
·2-min read

United Fire Group (UFCS) shares ended the last trading session 5.4% higher at $34.33. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 8.1% gain over the past four weeks.

Focus on reducing size of Commercial Auto portfolio combined with rate increase should continue to help retain profitability of Commercial Auto book of business.

The strategic decision to exit personal lines has helped lower volatility thus improve profitability.

Its solid track of paying dividends for straight 217 quarters bodes well for yield seeking investors. The board approved a 6.7% hike in its quarterly dividend.

This property and casualty insurance company is expected to post quarterly earnings of $0.47 per share in its upcoming report, which represents a year-over-year change of +34.3%. Revenues are expected to be $242.8 million, down 0.7% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For United Fire, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on UFCS going forward to see if this recent jump can turn into more strength down the road.

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The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

United Fire is part of the Zacks Insurance - Property and Casualty industry. ProAssurance (PRA), another stock in the same industry, closed the last trading session 0.6% higher at $21.97. PRA has returned 2.3% in the past month.

ProAssurance's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.09. Compared to the company's year-ago EPS, this represents a change of -81.6%. ProAssurance currently boasts a Zacks Rank of #3 (Hold).


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