UFCS
United Fire Group, Inc.
$56.44
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 51.9% below fair value
You pay
$56.44
Bear
$77.47
Fair
$117.31
Bull
$121.34
Bear
$77.47
+37.3%
ROTCE 11.4% → 2.55x TBV
Fair
$117.31
+107.9%
ROTCE 15.2% → 3.87x TBV
Bull
$121.34
+115.0%
ROTCE 17.4% → 4.00x TBV
Adjust Assumptions
15.2%
6.9%
Key Value Driver
ROTCE (15.2%) vs. cost of equity (6.9%)
Implied Market Multiple
1.86x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (6 analysts)
$60.00
Divergence from AlphaVal
96%
Summary
With ROTCE of 15.2% vs. 6.9% cost of equity, fair P/TBV is 3.87x on $30.34 tangible book, implying $117.31 per share. DDM cross-check: $29.01.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Dividend-based valuation: $29.01 (75% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $60.00 (from 6 analysts). Our estimate is 96% above the consensus -- consider that gap carefully.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly