As of October 19, 2025, Universal Insurance Holdings Inc's estimated intrinsic value ranges from $31.28 to $62.00 per share, depending on the valuation methodology applied.
Valuation Method | Fair Value (USD) | Implied Upside/Downside |
---|---|---|
Dividend Discount Model (Multi-Stage) | $62.00 | +120.7% |
Dividend Discount Model (Stable) | $31.28 | +11.4% |
Is Universal Insurance Holdings Inc (UVE) undervalued or overvalued?
With the current market price at $28.09, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Universal Insurance Holdings Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
WACC Component | Low | High |
---|---|---|
Long-term bond rate | 3.9% | 4.4% |
Equity market risk premium | 4.6% | 5.6% |
Adjusted beta | 0.59 | 0.62 |
Cost of equity | 6.6% | 8.3% |
Cost of debt | 5.0% | 5.0% |
Tax rate | 23.0% | 25.9% |
Debt/Equity ratio | 0.12 | 0.12 |
After-tax WACC | 6.3% | 7.8% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
Metric | Value |
---|---|
Market Capitalization | $796M |
Enterprise Value | $529M |
Trailing P/E | 11.98 |
Forward P/E | 10.82 |
Trailing EV/EBITDA | 0.00 |
Current Dividend Yield | 272.44% |
Dividend Growth Rate (5Y) | -2.40% |
Debt-to-Equity Ratio | 0.12 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
Valuation Method | Weight | Weighted Value |
---|---|---|
Dividend Discount Model (Multi-Stage) | 57% | $12.40 |
Dividend Discount Model (Stable) | 43% | $4.69 |
Weighted Average | 100% | $48.84 |
Based on our comprehensive valuation analysis, Universal Insurance Holdings Inc's intrinsic value is $48.84, which is approximately 73.9% above the current market price of $28.09.
Key investment considerations:
Given these factors, we believe Universal Insurance Holdings Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.