Stewart Information Services (STC) Financials

Stewart Information Services Corp. (NYSE: STC) has shown mixed financial performance over the past four years, with some notable trends concerning revenues, profitability, cash flow, and balance sheet strength.

• The company maintains a strong base of total assets, consistently around $2.6 to $2.7 billion over recent quarters, reflecting stable asset size.
• Goodwill remains substantial, approximately $1.07 to $1.09 billion, indicating strategic acquisitions or brand value retained.
• Despite volatile quarterly net income, Stewart achieved a positive net income of $5.4 million in Q1 2025, after overcoming losses in early 2023.
• Total revenues in recent quarters hover around $350 million to $430 million, showing relative stability in top-line performance.
• Other non-interest income experienced a strong recovery, reaching $596 million in Q1 2025, nearly doubling from previous quarters, which positively supports revenue diversification.
• Interest expense related to long-term debt has remained relatively stable, around $4.9 to $5.1 million per quarter, with net interest expense consistently negative, but manageable.
• Salaries and employee benefits expenses have gradually increased over the years, with $185 million recorded in Q1 2025, indicating a potential rise in workforce costs.
• The company pays a stable quarterly dividend, around $0.45 to $0.50 per common share, reflecting a commitment to shareholder returns.
• Operating cash flows have been volatile, with significant negative cash flow of nearly $30 million in Q1 2025, contrasting with positive cash flow in past quarters, raising concerns on liquidity management.
• Net cash used in investing activities has persisted as a cash outflow, approximately $20-75 million quarterly, mostly driven by investment purchases exceeding sales, which could pressure free cash flow.
• Financing activities indicate ongoing dividend payments and share repurchases, totaling around $18-25 million net cash outflow quarterly, which combined with negative operating cash flow could stress cash reserves.
• Negative net income and EPS were reported in Q1 2023, with a loss of $8.2 million attributable to common shareholders and EPS of -$0.30, highlighting past profitability challenges.

Summary: Over the last four years, Stewart Information Services has demonstrated resilience with stable asset and revenue bases and improving profitability in recent quarters. However, consistent negative operating cash flows and sizeable investing outflows pose liquidity challenges. Investors should watch cash flow trends and cost management closely, as rising expenses and financial outflows could impact future shareholder value despite positive earnings recovery.