Unitrin: Profitable Insurance Company Trading Under Tangible Book, Yields 3.6%

Insurance holding company Unitrin (UTR) is an attractive value play in the P&C insurance field, with strong prospects of increasing earnings and dividend payouts. At recent prices around 24.50, the company trades at a Price/Tangible Book of .85 and a TTM P/E of 7.1. Analysis reveals that management is winding down or fixing two under-performing segments, a process that can be expected to lead to improving earnings over the next year. The dividend yields 3.6% at today's price and the company has been buying back shares at below tangible book. I got the idea from one of my broker's (Schwab) website: they have an alphabetical rating system, it gives financials as a group an underperform, all financial subsectors other than insurance are D or F, insurance gets a C, many insurers get good grades, UTR is among them and gets an A. Their rating system relies on numerous variables and is a black box as far as I'm concerned. However, it does have a strong momentum component which is helpful to me. Many value stocks lack momentum and if I can find a value stock that scores high on their system the odds of success are improved. It's a way of getting at value plus momentum.... Read more

Older articles featuring UTR: