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Why Safety Insurance Is Poised to Keep Poppin'

By Brian D. Pacampara, CFA - Apr 1, 2013 at 4:12PM

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Market-trouncing returns could be written in these five stars.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, property and casualty insurer Safety Insurance Group (SAFT 1.25%) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at Safety Insurance and see what CAPS investors are saying about the stock right now.

Safety Insurance facts

Headquarters (founded)

Boston (1979)

Market Cap

$753.3 million

Industry

Property and casualty insurance

Trailing-12-Month Revenue

$703.9 million

Management

CEO David Brussard (since 2001)
CFO William Begley Jr. (since 1999)

Return on Equity (average, past 3 years)

6.5%

Cash / Debt

$35.4 million / $0

Dividend Yield

4.9%

Competitors

Arbella Mutual Insurance
Liberty Mutual Holding
MAPFRE U.S.A.

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 98% of the 507 members who have rated Safety Insurance believe the stock will outperform the S&P 500 going forward.

Just last week, one of those Fools, JohnStuartMill, tapped Safety Insurance as an income opportunity worth considering:

The 58% payout ratio has me a bit worried, but is due to the recent big storm hit. The 4.9% [dividend yield] could possibly be a short term high. I would buy in here with no expectations of an increase in the dividend rate in the near future. In fact, if the dividend were further increased, it would worry me.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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Stocks Mentioned

Safety Insurance Group, Inc. Stock Quote
Safety Insurance Group, Inc.
SAFT
$94.34 (1.25%) $1.16

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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