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Markel Corp (MKL)
NYSE:MKL
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Markel
(NYSE:MKL)73Outperform
Markel (MKL) vs. S&P 500 (SPY)
Market Cap
$23.81B
Dividend YieldN/A
Average Volume (3M)69.11K
Price to Earnings (P/E)9.4
Beta (1Y)0.40
Revenue Growth5.17%
EPS Growth35.36%
CountryUS
Employees21,600
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)199.04
Shares Outstanding12,770,003
10 Day Avg. Volume62,609
30 Day Avg. Volume69,112
Financial Highlights & Ratios
PEG Ratio0.26
Price to Book (P/B)N/A
Price to Sales (P/S)1.47
Price to Cash Flow (P/CF)12.40
P/FCF Ratio11.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$1,902.75Price Target Upside-0.20% Downside
Rating ConsensusHold
Number of Analyst Covering4
Markel Business Overview & Revenue Model
Company DescriptionMarkel Corporation (MKL) is a diverse financial holding company headquartered in the United States, operating primarily in the insurance sector while also engaging in investment operations and ventures. The company is known for offering specialty insurance products across various market segments, including excess and surplus lines, reinsurance, and more niche markets such as equine and livestock insurance. Beyond insurance, Markel is involved in a range of other industries through its investment portfolio and through Markel Ventures, which acquires controlling interests in various businesses outside of the insurance industry.
How the Company Makes MoneyMarkel Corporation generates revenue primarily through its insurance operations, which include underwriting a wide array of specialty insurance products. The company earns premiums from policyholders in exchange for providing insurance coverage. In addition to underwriting profits, Markel invests the premiums it collects, aiming to generate investment income. The company's investment portfolio includes fixed income securities, equities, and other financial instruments. Furthermore, Markel Ventures contributes to the company's revenue by owning and operating a diverse group of businesses across different sectors such as manufacturing, transportation, and consumer and business services. These ventures provide additional income streams and help diversify Markel's earnings beyond its core insurance operations.
Markel Financial Statement Overview
Summary
Markel presents a strong financial profile with robust revenue growth and profitability margins. The balance sheet shows low leverage and strong equity, although the absence of 2024 cash flow data presents some uncertainty. Overall, the company shows financial resilience but has room for improvement in cash flow management.Income Statement
Markel has shown strong revenue growth over the years, with a significant jump in total revenue from $15.8 billion in 2023 to $16.6 billion in 2024. The gross profit margin remains robust, indicating efficient cost management. The net profit margin has improved from 12.6% in 2023 to 26.6% in 2024, reflecting better profitability. EBIT and EBITDA margins are also strong, underscoring operational efficiency. However, fluctuations in EBIT in earlier years highlight potential volatility.85
Very Positive
Balance Sheet
Markel's balance sheet reflects a solid equity position with stockholders' equity increasing to $17.7 billion in 2024. The debt-to-equity ratio is low, indicating prudent financial leverage. ROE has improved significantly, showcasing enhanced profitability for shareholders. However, the absence of total assets data in 2024 restricts a comprehensive analysis of the equity ratio.78
Positive
Cash Flow
While Markel has historically maintained positive free cash flow, the absence of detailed cash flow data for 2024 limits a thorough analysis. The company demonstrated a strong operating cash flow to net income ratio in prior years, indicating good cash generation capability. However, fluctuations in free cash flow growth rates suggest potential volatility in cash management.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 16.62B | 15.80B | 11.82B | 12.92B | 9.64B | Gross Profit |
| 16.62B | 15.62B | 11.64B | 12.76B | 9.48B | EBIT |
| 3.71B | 2.93B | 878.63M | -880.80M | -2.15B | EBITDA |
| 3.84B | 2.93B | 411.45M | 3.65B | 1.49B | Net Income Common Stockholders |
| 2.75B | 2.00B | -101.20M | 2.42B | 816.03M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 10.56B | 10.21B | 18.66B | 18.37B | 17.06B | Total Assets |
| 61.90B | 55.05B | 63.44B | 48.48B | 41.71B | Total Debt |
| 0.00 | 3.78B | 4.10B | 4.36B | 3.48B | Net Debt |
| 637.67M | 32.74M | -33.80M | 382.78M | -857.71M | Total Liabilities |
| 44.43B | 39.52B | 25.54B | 24.18B | 21.21B | Stockholders Equity |
| 17.66B | 14.98B | 13.07B | 14.70B | 12.80B |
| Cash Flow | Free Cash Flow | |||
| 2.34B | 2.53B | 2.45B | 2.13B | 1.64B | Operating Cash Flow |
| 2.59B | 2.79B | 2.71B | 2.27B | 1.74B | Investing Cash Flow |
| -2.40B | -2.70B | -1.67B | -2.94B | -511.75M | Financing Cash Flow |
| -297.88M | -999.72M | -595.31M | 369.77M | 434.56M |
Markel Technical Analysis
Positive
1906.47
Price Trends
1817.33
Positive
1737.87
Positive
1656.43
Positive
Market Momentum
19.18
Positive
55.38
Neutral
51.85
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MKL, the sentiment is Positive. The current price of 1906.47 is above the 20-day moving average (MA) of 1905.76, above the 50-day MA of 1817.33, and above the 200-day MA of 1656.43, indicating a bullish trend. The MACD of 19.18 indicates Positive momentum. The RSI at 55.38 is Neutral, neither overbought nor oversold. The STOCH value of 51.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MKL.
Markel Risk Analysis
Markel disclosed 21 risk factors in its most recent earnings report. Markel reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Markel Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $23.60B | 14.29 | 20.92% | 0.49% | 12.32% | 29.21% | |
75 Outperform | $1.07T | 12.01 | 14.70% | ― | 1.91% | -6.72% | |
73 Outperform | $23.81B | 9.37 | 15.55% | ― | 5.17% | 35.36% | |
73 Outperform | $12.05B | 6.95 | 17.69% | 0.65% | 28.22% | -31.48% | |
71 Outperform | $47.38B | 15.77 | -3.30% | 1.95% | -28.56% | 1.14% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
60 Neutral | $18.11B | 13.27 | 7.40% | 0.29% | 10.44% | 1.63% |
* Financial Sector Average
Performance Comparison
MKL
Markel
1,906.47
400.21
26.57%
AIG
American International Group
81.31
8.03
10.96%
L
Loews
85.34
10.10
13.42%
RNR
Renaissancere Holdings
244.00
17.30
7.63%
WRB
W. R. Berkley Corporation
62.53
7.40
13.42%
BRK.B
Berkshire Hathaway B
498.50
94.54
23.40%
Markel Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: 2.49% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in operating income growth, ventures performance, and equity portfolio gains. However, there were notable challenges in the insurance segment, particularly within the US specialty and reinsurance areas. While the company has made strides in addressing these issues, the increase in the expense ratio and continued struggles in certain insurance lines were concerning. The sentiment is balanced due to these mixed results.Highlights
Strong Operating Income Growth
Markel Group's operating income was $3.7 billion in 2024, up from $2.9 billion in 2023, driven by unrealized gains in the equity portfolio.
Ventures Business Performance
Markel Ventures reported revenues exceeding $5 billion for the first time, with operating income of $520 million, driven by consumer and building products.
International Insurance Success
Markel International delivered a sub-80 combined ratio with strong growth and investments in new products and markets.
Equity Portfolio Gains
Equity portfolio earned a 20.1% return, with $1.8 billion in net investment gains included in 2024 operating income.
Share Repurchases
Markel Group repurchased $573 million in shares in 2024, with an additional $2 billion authorized for future repurchases.
Lowlights
Insurance Underperformance
US Specialty insurance business fell short of expectations due to underperformance in US casualty and risk-managed professional liability books.
Reinsurance Challenges
Reinsurance segment reported a combined ratio of 101 for the year, trailing targets due to higher attritional loss ratios and large individual losses.
Expense Ratio Increase
The expense ratio increased to 36% in 2024 from 35% in 2023, driven by decreased earned premiums and higher operating expenses.
Casualty Insurance Struggles
Continued challenges in US public D&O and large financial institutions coverage, with recent actions to streamline operations.
Company Guidance
During the Markel Group's fiscal year 2024 conference call, significant guidance was provided, highlighting numerous performance metrics. The company reported a total operating income of $3.7 billion, up from $2.9 billion in 2023, driven largely by unrealized gains in the equity portfolio, which saw a return of 20.1%. The insurance segment achieved $601 million in operating income, despite a mixed performance, with a combined ratio of 94.3%, showing improvement from 97.8% in 2023. Ventures' operating income was $520 million, supported by growth in consumer and building products. Markel's intrinsic value compounded at 18.3% over five years, compared to a total shareholder return of 8.6%. Additionally, the company executed share repurchases totaling $573 million in 2024, with an additional $2 billion authorized. Looking forward, Markel aims to enhance its insurance operations' profitability, improve efficiency, and better communicate ventures' performance to shareholders, with a focus on achieving consistent excellence across all operations.Markel Corporate Events
Financial Disclosures
Markel Highlights Strong 2024 Financial Performance
Positive
Feb 24, 2025
On February 24, 2025, Markel Group Inc. released its 2024 Letter to Shareholders, highlighting the company’s growth in intrinsic value per share and its financial performance. The letter, written by CEO Thomas S. Gayner, underscores Markel’s commitment to long-term principles and shareholder alignment, reflecting on its strong financial results and the importance of maintaining a stable and conservative balance sheet. The company reported significant increases in total operating revenues and comprehensive income to shareholders, indicating robust financial health and strategic positioning in the market.
Executive/Board Changes
Markel Increases CFO’s Equity Award Target
Neutral
Feb 21, 2025
On February 18, 2025, the Compensation Committee of Markel Group Inc. approved a change in executive compensation for CFO Brian J. Costanzo, increasing his equity award target from 125% to 175% of his base salary. For the 2025 performance year, the equity awards will be split into 75% performance-based and 25% service-based, with metrics including operating income and stock price growth over five years, reflecting a strategic emphasis on aligning executive rewards with long-term company performance.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.