Fact based stock research
Direct Line Insurance (LSE:DLG)

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Direct Line Insurance stock research in summary

directlinegroup.co.uk

ANALYSIS: With an Obermatt Combined Rank of 71 (better than 71% compared with investment alternatives), Direct Line Insurance (Property & Casualty Insurance, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Direct Line Insurance are a good value (attractively priced) with a consolidated Value Rank of 81 (better than 81% of alternatives) but show below-average growth (Growth Rank of 3), and are riskily financed (Safety Rank of 31), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 71, is a buy recommendation based on Direct Line Insurance's financial characteristics. As the company Direct Line Insurance's key financial metrics exhibit good value (Obermatt Value Rank of 81) but low growth (Obermatt Growth Rank of 3) and risky financing practices (Obermatt Safety Rank of 31), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 81% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	81
Growth Rank	3
Safety Rank	31
Combined Rank	71

Country	United Kingdom
Industry	Property & Casualty Insurance
Index	FTSE All Shares, FTSE 250, FTSE 350, Dividends Europe
Size class	X-Large

This stock has achievements: Gold Winner CEO.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Direct Line Insurance

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	39	47	51	81
GROWTH
GROWTH	7	5	37	3
SAFETY
SAFETY	74	31	31	31
SENTIMENT
SENTIMENT	n/a	45	15	^new
360° VIEW
360° VIEW	n/a	15	37	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Direct Line Insurance is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	39	47	51	81
GROWTH
GROWTH	7	5	37	3
SAFETY
SAFETY	74	31	31	31
COMBINED
COMBINED	37	71	71	71

Last update of combined financial performance: 6-Oct-2022. Stock analysis on combined financial performance: The higher the rank of Direct Line Insurance the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 81 (better than 81% compared with alternatives) for 2022, Direct Line Insurance shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Direct Line Insurance. Price-to-Sales is 74 which means that the stock price compared with what market professionals expect for future sales is lower than for 74% of comparable companies, indicating a good value for Direct Line Insurance's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 57% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 76. Compared with other companies in the same industry, dividend yields of Direct Line Insurance are expected to be higher than for 71% of all competitors (a Dividend Yield rank of 71). ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 81, is a buy recommendation based on Direct Line Insurance's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Direct Line Insurance based on its detailed value metrics. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	14	35	51	74
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	61	41	31	57
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	27	31	55	76
DIVIDEND YIELD
DIVIDEND YIELD	94	93	76	71
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	39	47	51	81

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Direct Line Insurance; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 3 (better than 3% compared with alternatives), Direct Line Insurance shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Direct Line Insurance. Only Capital Growth has a good rank of 79, which means that currently professionals expect the company to grow its invested capital more than 6% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 6 which means that currently professionals expect the company to grow less than 94% of its competitors. Profit Growth with a rank of 6 and Stock Returns with a rank of 15 are also low (below 85% of alternative investments). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 3, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Direct Line Insurance is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	15	55	8	6
PROFIT GROWTH
PROFIT GROWTH	23	22	98	6
CAPITAL GROWTH
CAPITAL GROWTH	n/a	17	49	79
STOCK RETURNS
STOCK RETURNS	14	13	7	15
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	7	5	37	3

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Direct Line Insurance.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 31 (better than 31% compared with alternatives), the company Direct Line Insurance has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Direct Line Insurance is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Direct Line Insurance and the other two below average. Leverage is at a rank of 82 meaning the company has a below-average debt-to-equity ratio. It has less debt than 82% of its competitors.Refinancing is at a rank of 8, which means that the portion of the debt about to be refinanced is above-average. It has more debt in the refinancing stage than 92% of its competitors. Liquidity is at a rank of 4, meaning that the company generates less profit to service its debt than 96% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 31 (worse than 69% compared with alternatives), Direct Line Insurance has a financing structure that is riskier than that of its competitors. This is an indication that the company is on the riskier side when it comes to debt service. There is only below-market average liquidity, and a short-term refinancing issue might be around the corner. But in the long-term, the debt levels of Direct Line Insurance are on the safer side. Investors may have a short-term debt challenge and liquidity issues with Direct Line Insurance and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	72	52	82	82
REFINANCING
REFINANCING	35	8	8	8
LIQUIDITY
LIQUIDITY	72	59	1	4
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	74	31	31	31

Last update of Safety Rank: 6-Oct-2022. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Direct Line Insurance and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	78	28	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	7	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	79	7	^new
MARKET PULSE
MARKET PULSE	n/a	26	43	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	45	15	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Direct Line Insurance.
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