Admiral Group: Still A Solid Quality Growth Pick

2025-05-29 13:52:26 ET

Summary

• Shares of U.K. motor insurer Admiral Group have been a strong performer since my last update back in 2023, with the ADSs returning north of 60%.
• As expected, Admiral's underwriting profitability has rebounded sharply after being squeezed by high inflation, while the company is also back to posting strong volume growth.
• Admiral trades for less than 16x last year's EPS. Given its history of winning market share and ability to pay out most of its earnings, this looks reasonably cheap.

It's getting on for two years since I last shared my thoughts on U.K. motor insurer Admiral Group ( OTCPK:AMIGY ) ( OTCPK:AMIGF ). The bull case was relatively simple. At the time, the company was still emerging from a macro-driven trough in its earnings, driven by the post-COVID normalization of claims frequency as well as the impact of high inflation on claims severity. A then-20x EPS multiple, based on heavily depressed earnings, looked like a very reasonable price to pay. ...

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