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Tab on a file folder for insurance.

Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.

Universal Insurance Holdings Inc. is a vertically-integrated insurance holding company, with a $650-million (U.S.) market cap, involved in insurance underwriting, distribution and claims. Its subsidiaries offer homeowners insurance in Florida, North Carolina, South Carolina, Hawaii, Georgia, Massachusetts and Maryland.

The company gets strong interest from the Motley Fool-based model, inspired by an approach outlined by Fool co-creators Tom and David Gardner. The model likes its strong recent growth (52.5 per cent for EPS and 32.1 per cent for sales last quarter). The Fool model also likes UVE's high and rising profit margins (8.9 per cent two years ago, 11.2 per cent a year ago, and 19.6 per cent in the current year).

Universal Insurance Holdings has a 95 twelve-month relative strength and a 2.1-per-cent dividend yield .

The Peter Lynch-based model likes its 17-per-cent long-term EPS growth rate (using the average of the three-, four-, and five-year EPS growth rates) and 0.52 yield-adjusted P/E-to-growth ratio (P/E divided by the sum of EPS growth and dividend yield). The Lynch model also liked its 20-per-cent equity/assets ratio and 7-per-cent return on assets.

The Martin Zweig-based model likes that EPS growth has been accelerating (17 per cent over the long term, 52.5 per cent last quarter), and that sales growth has also been heating up (32 per cent last quarter vs. 12 per cent the prior quarter.

The company has a 38-per-cent return on equity and has averaged a 33.2-per-cent return on retained earnings (those not paid out as dividends) over the past decade, which Warren Buffett model likes.

As a small-cap, the company tends to experience a good deal more volatility than the broader market.

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