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Trisura Group Ltd (TSE:TSU)
TSX:TSU
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Trisura Group Ltd
(TSX:TSU)
70Outperform
Positive Factors
Investment Opportunity
Trisura provides a unique investment opportunity in a pure-play specialty insurer in Canada, one capable of materially outgrowing the larger P&C and life insurance companies.
Net Premiums Growth
Net premiums earned, a better indicator of revenue growth, was up an impressive 87% year-over-year.
Profitability and Growth
A target price of $52.00 supports a BUY rating, based on strong long-term book value growth, operating earnings growth, and a superior ROE.
Negative Factors
Underwriting Income
U.S. Programs experienced weaker net underwriting income due to adverse weather-related claims and some reserve development.
Trisura Group Ltd (TSU) vs. S&P 500 (SPY)
Market Cap
C$1.60B
Dividend YieldN/A
Average Volume (3M)103.20K
Price to Earnings (P/E)14.2
Beta (1Y)1.05
Revenue Growth13.42%
EPS Growth72.70%
CountryCA
Employees159
SectorFinancial
Sector Strength82
IndustryInsurance - Specialty
Share Statistics
EPS (TTM)2.49
Shares Outstanding47,779,022
10 Day Avg. Volume78,575
30 Day Avg. Volume103,200
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)N/A
Price to Sales (P/S)0.48
Price to Cash Flow (P/CF)3.90
P/FCF Ratio3.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$51.00Price Target Upside43.50% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Trisura Group Ltd Business Overview & Revenue Model
Company DescriptionTrisura Group Ltd., a specialty insurance company, operates in the surety, risk solutions, corporate insurance, and reinsurance businesses in Canada, the United States, and internationally. The company offers contract surety bonds, such as performance, and labor and material payment bonds primarily for the construction industry; commercial surety bonds, including license and permit, tax and excise, and fiduciary bonds to governments, regulatory bodies, or courts to guarantee compliance with legal or fiduciary obligations; and developer surety bonds comprising bonds to secure real estate developers' legislated deposit and warranty obligations on residential projects. It provides risk solutions, including warranty programs to program administrators, managing general agents, captive insurance companies, affinity groups, and reinsurers. The company also offers corporate insurance products that comprise directors' and officers' insurance for public, private, and non-profit enterprises; errors and omissions liability insurance for enterprises and professionals; business office package insurance for enterprises and professionals; and fidelity insurance for commercial and financial institutions. Trisura Group Ltd. was incorporated in 2017 and is headquartered in Toronto, Canada.
How the Company Makes MoneyTrisura Group Ltd generates revenue primarily through the underwriting of insurance policies and the collection of premiums. The company's key revenue streams include surety bonds, which provide financial guarantees on behalf of clients, as well as specialty insurance products that cater to unique risk management needs. Trisura also earns income through investment activities, leveraging the premiums collected to generate returns. Significant partnerships with brokerage firms and a strong network of agents help expand their market reach and client base, contributing to their overall earnings.
Trisura Group Ltd Financial Statement Overview
Summary
Trisura Group Ltd presents a robust financial position with strong profitability and low leverage. While revenue decline poses a risk, the company’s solid balance sheet and efficient cash management provide a buffer against market fluctuations. Continuous monitoring of revenue trends will be crucial for sustained growth.Income Statement
The income statement shows solid gross and net profit margins, indicating strong profitability. However, the significant drop in total revenue from the previous year raises concerns about the company's revenue stability. The company has maintained a positive EBITDA margin, which supports operational efficiency.75
Positive
Balance Sheet
Trisura Group Ltd displays a strong equity ratio, indicating a healthy proportion of equity to total assets. The debt-to-equity ratio is low, suggesting minimal reliance on debt financing. The return on equity shows improvement, reflecting effective use of shareholder funds.80
Positive
Cash Flow
The cash flow statement indicates a decrease in free cash flow, suggesting potential challenges in generating cash from operations. However, the company maintains a positive operating cash flow to net income ratio, demonstrating effective cash management relative to net earnings.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 778.83M | 2.84B | 526.10M | 349.88M | 226.63M | Gross Profit |
| 778.83M | 2.84B | 526.10M | 349.88M | 226.63M | EBIT |
| 0.00 | 2.83B | 38.08M | 80.44M | 39.48M | EBITDA |
| 163.19M | 94.49M | 38.39M | 86.01M | 43.22M | Net Income Common Stockholders |
| 118.92M | 66.94M | 27.80M | 62.56M | 32.44M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.36B | 611.52M | 1.17B | 341.32M | 136.52M | Total Assets |
| 4.59B | 3.58B | 4.28B | 3.00B | 1.71B | Total Debt |
| 107.57M | 84.70M | 86.74M | 84.68M | 36.35M | Net Debt |
| -162.80M | -519.32M | -319.63M | -256.64M | -100.17M | Total Liabilities |
| 3.81B | 2.97B | 3.80B | 2.64B | 1.42B | Stockholders Equity |
| 785.27M | 619.43M | 483.29M | 358.79M | 289.86M |
| Cash Flow | Free Cash Flow | |||
| 115.89M | 257.20M | 148.80M | 303.39M | 82.05M | Operating Cash Flow |
| 119.73M | 257.91M | 150.93M | 306.85M | 83.34M | Investing Cash Flow |
| -471.81M | -117.34M | -241.99M | -148.65M | -94.40M | Financing Cash Flow |
| 22.04M | 48.06M | 141.59M | 45.15M | 63.63M |
Trisura Group Ltd Technical Analysis
Positive
35.54
Price Trends
33.66
Positive
36.39
Negative
39.28
Negative
Market Momentum
0.01
Negative
66.01
Neutral
90.25
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:TSU, the sentiment is Positive. The current price of 35.54 is above the 20-day moving average (MA) of 32.87, above the 50-day MA of 33.66, and below the 200-day MA of 39.28, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 66.01 is Neutral, neither overbought nor oversold. The STOCH value of 90.25 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:TSU.
Trisura Group Ltd Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | C$52.43B | 23.75 | 13.38% | 1.65% | 5.02% | 77.36% | |
73 Outperform | C$52.53B | 13.49 | 15.52% | 3.94% | -2.40% | 42.24% | |
70 Outperform | C$1.60B | 14.25 | 16.93% | ― | 13.42% | 72.70% | |
63 Neutral | $14.35B | 9.94 | 8.94% | 4.37% | 16.34% | -11.76% |
* Financial Sector Average
Performance Comparison
TSE:TSU
Trisura Group Ltd
35.34
-5.70
-13.89%
MFC
Manulife Financial
32.35
8.79
37.31%
SLF
Sun Life Financial
58.77
7.67
15.01%
FRFHF
Fairfax Financial Holdings
1,494.84
419.70
39.04%
TSE:GWO
Great-West Lifeco
57.05
16.50
40.69%
TSE:IFC
Intact Financial Corporation
298.56
84.70
39.61%
Trisura Group Ltd Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: 5.43% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call presentation was broadly positive, highlighting significant income growth, strong performance in the U.S. Surety business, and positive investment income. However, challenges were noted with exited lines and higher expense ratios, which tempered the overall positive outlook.Highlights
Strong Financial Performance
Trisura Group Ltd. achieved record operating and reported net income of $136 million and $119 million, respectively, for the year. The company also reported a 26% growth in book value per share and an operating return on equity of 19%.
Significant Growth in U.S. Surety
U.S. Surety business grew 197% in 2024, moving Trisura to a rank in the top 35 of U.S. Sureties from a rank of 51 at the end of 2023.
Positive Investment Income
Net investment income grew by 29.8% year-to-date, with a focus on investment-grade corporate and government bonds contributing to the growth.
Operational Efficiency
An annual combined ratio of 89% was achieved, with specific segments like Trisura Specialty showing an operating combined ratio of 84%.
Expansion in Canadian and U.S. Markets
Continued growth in Canadian and U.S. markets, with an emphasis on expanding primary lines and strategic hires to enhance market presence.
Lowlights
Challenges with Exited Lines
The company faced issues with certain exited lines, resulting in negative reserve developments due to non-renewed and underperforming programs.
Higher Expense Ratios
Higher expense ratios were reported, driven partly by start-up costs associated with U.S. Corporate Insurance and U.S. Surety, as well as greater retention of U.S. programs.
Deceleration in Canadian Fronting Growth
Growth in the Canadian Fronting business decelerated through 2024, turning negative in Q4, attributed to market dynamics and previous strong quarters.
Company Guidance
During the call, Trisura Group Ltd. provided guidance reflecting strong performance in 2024 and a positive outlook for the future. The company reported a 26% growth in book value per share, driven by an annual combined ratio of 89%, record net income of $136 million, and a return on equity of 19%. Specialty Insurance, particularly Surety, Corporate Insurance, and Warranty, showed mid-teens growth, with U.S. Surety expanding by 197% and achieving a 15% annual loss ratio. The operating combined ratio was reported at 81% for ongoing U.S. programs. Trisura aims for over 15% growth in premium, operating return on equity, and book value per share, targeting $1 billion in book value by 2027. The company remains optimistic about expanding its North American Specialty Insurance presence and leveraging market opportunities amid volatility.Trisura Group Ltd Corporate Events
Business Operations and StrategyFinancial Disclosures
Trisura Group Achieves Record Annual Results and Expands US Market Presence
Positive
Feb 13, 2025
Trisura Group Ltd. reported record-breaking annual financial results for 2024, with operating net income reaching $135.8 million. The company’s growth was driven by strong underwriting, increased net investment income, and strategic expansion in the US market. Despite challenges from non-renewed US programs, Trisura achieved significant increases in book value and net income. The company’s financial health is underscored by a conservative debt-to-capital ratio, supporting its capacity for further growth.
Financial Disclosures
Trisura Group Ltd. Schedules 2024 Earnings Release and Conference Call
Neutral
Feb 6, 2025
Trisura Group Ltd. announced it will release its fourth quarter and annual 2024 results on February 13, 2025, followed by an earnings conference call on February 14, 2025. The announcement highlights the company’s commitment to transparency and provides an opportunity for stakeholders to gain insights into Trisura’s financial performance and strategic direction.
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.