- Admiral is the leader in U.K. motor insurance, similar to GEICO and Progressive. Shares fell to their lowest since August 2020 after recent results.
- Admiral continues to gain customers and market share with its cost advantage; in 2015-19, premiums and profits grew at a CAGR of 8%.
- Adjusted Profit Before Tax actually rose 26% in 2021, but is expected to decline in 2022 as conditions normalize after COVID.
- We believe profit declines will be limited and cyclical in nature. Prices have already started rising in Q4 2021 and a new reform should help.
- With shares at 2,439p, we expect a total return of 69% (17.5% annualised) by 2025 year-end. The Dividend Yield is 5.6%.
For further details see:
Admiral: Cyclical Fears Overblown, Compounding Long-Term With 5.6% Dividend Yield