Stock Buyback Program Announced by Universal Insurance (NYSE:UVE) Board

Key Points

• Universal Insurance authorized a $20 million share buyback, allowing the company to repurchase up to 1.6% of its outstanding shares through open-market purchases—often a signal that management views the stock as undervalued.
• The stock rose 3.3% to $47.50, while quarterly EPS of $1.93 exceeded analysts’ $1.57 consensus estimate. Analysts forecast full-year EPS of $6.13.
• Analyst sentiment was favorable, with a consensus “Buy” rating and a $51 price target; however, Chairman Sean Downes recently sold 20,000 shares, reducing his ownership by 1.81%.

Universal Insurance (NYSE:UVE - Get Free Report) declared that its board has initiated a share buyback plan on Thursday, October 29th, RTT News reports. The company plans to repurchase $20 million in shares. This repurchase authorization authorizes the insurance provider to reacquire up to 1.6% of its shares through open market purchases. Stock repurchase plans are often an indication that the company's board of directors believes its stock is undervalued.

Universal Insurance Stock Up 3.3%

Shares of NYSE:UVE traded up $1.52 during trading hours on Thursday, reaching $47.50. The stock had a trading volume of 220,051 shares, compared to its average volume of 221,607. Universal Insurance has a 1 year low of $28.32 and a 1 year high of $50.75. The firm's 50 day moving average is $44.68 and its 200-day moving average is $38.71. The stock has a market capitalization of $1.32 billion, a price-to-earnings ratio of 5.94 and a beta of 0.69. The company has a debt-to-equity ratio of 0.15, a quick ratio of 0.57 and a current ratio of 0.56.

Universal Insurance (NYSE:UVE - Get Free Report) last posted its quarterly earnings results on Thursday, October 22nd. The insurance provider reported $1.93 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.57 by $0.36. Universal Insurance had a net margin of 13.94% and a return on equity of 38.15%. The firm had revenue of $444.31 million during the quarter, compared to analysts' expectations of $601.67 million. Research analysts predict that Universal Insurance will post 6.13 earnings per share for the current fiscal year.

Wall Street Analyst Weigh In

Several research analysts recently commented on the company. Wall Street Zen raised Universal Insurance from a "buy" rating to a "strong-buy" rating in a research note on Saturday, October 3rd. Piper Sandler increased their price target on Universal Insurance from $45.00 to $51.00 and gave the company a "neutral" rating in a research report on Monday. Weiss Ratings upgraded Universal Insurance from a "buy (a-)" rating to a "buy (a+)" rating in a research note on Thursday, October 8th. Finally, Zacks Research raised Universal Insurance from a "hold" rating to a "strong-buy" rating in a research report on Thursday, October 22nd. Two equities research analysts have rated the stock with a Strong Buy rating and one has given a Hold rating to the stock. According to data from MarketBeat, Universal Insurance has a consensus rating of "Buy" and a consensus price target of $51.00.

Insiders Place Their Bets

In other Universal Insurance news, Chairman Sean Downes sold 20,000 shares of the stock in a transaction on Friday, September 11th. The stock was sold at an average price of $43.98, for a total value of $879,600.00. Following the completion of the transaction, the chairman owned 1,084,645 shares in the company, valued at approximately $47,702,687.10. This represents a 1.81% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. 15.00% of the stock is owned by corporate insiders.

About Universal Insurance

Universal Insurance Holdings, Inc NYSE: UVE is an insurance holding company that provides property and casualty insurance through its subsidiaries. Its primary business is personal residential insurance, with products designed to protect homeowners and other residential property owners against risks such as wind, fire, theft and other covered losses.

The company's offerings include homeowners, condominium unit owners, renters and dwelling fire insurance, along with related residential property coverage.

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