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Heritage Insurance Holdings, Inc., a property and casualty insurance holding company, provides personal residential insurance for single-family home owners and condominium owners in Florida. It's market cap is $650-million (U.S.). Its subsidiary, Heritage Property & Casualty Insurance Company, writes approximately $500-million of personal and commercial residential premium through a large network of agents. Florida P&C insurers are always at risk if a bad hurricane season hits, but Heritage's fundamentals look strong.
The company has grown earnings at a 44-per-cent pace (using an average of the 3- and 4-year EPS growth rates) and sales at a 164-per-cent pace (using an average of the 3-, 4-, and 5-year sales growth rates) over the long term.
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Its EPS growth rate and 9.3 P/E ratio make for a 0.21 PE-to-growth ratio, part of why the Peter Lynch model has strong interest. It also has a 43-per-cent equity/assets ratio and 14.5-per-cent return on assets rate, handily beating the 5-per-cent and 1-per-cent targets the Lynch model uses on financials.
The company has a red hot 92 relative strength over the past 12 months, 0.21 PEG ratio, and 23.5-per-cent profit margins, three reasons why the Motley Fool inspired model has strong interest.
It has the sort of accelerating growth the Martin Zweig-based model likes, with last quarter's earnings growth coming in at 270 per cent. It has a 35-per-cent return on equity, and has averaged an 89-per-cent return on retained earnings (those not paid out as dividends) over the past decade, which the Warren Buffett model likes.
John Reese owns HRTG.
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