UFCS
United Fire Group, Inc.
$54.85
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 49.7% below fair value
You pay
$54.85
Bear
$71.99
Fair
$109.02
Bull
$121.58
Bear
$71.99
+31.3%
ROTCE 11.4% → 2.37x TBV
Fair
$109.02
+98.8%
ROTCE 15.2% → 3.59x TBV
Bull
$121.58
+121.7%
ROTCE 17.4% → 4.00x TBV
Adjust Assumptions
15.2%
7.1%
Key Value Driver
ROTCE (15.2%) vs. cost of equity (7.1%)
Implied Market Multiple
1.8x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (6 analysts)
$60.00
Divergence from AlphaVal
82%
Summary
With ROTCE of 15.2% vs. 7.1% cost of equity, fair P/TBV is 3.59x on $30.39 tangible book, implying $109.02 per share. DDM cross-check: $26.79.
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: $26.79 (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 82% 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