Admiral Group PLC
🇬🇧 ADM.LSE · London · GB00B02J6398
Insurance
GBX 3214.00 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
13.3
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 3214.00 ÷ 241.74 = 13.3
TTM period through: 2025-12-31
Forward P/E (estimated): 12.7
Based on analyst estimates
Reference: Provider P/E (Trailing): 13.2
Yield (Fwd)
4.95%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 5.03%
Net Debt/EBITDA (TTM)
1.4x
Latest quarter: 3.1x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 3.1x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
65.8%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 96.3%
Cash Flow Payout (TTM): 98.5%
FCF Coverage (TTM): 0.91x
ROE
53.0%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
Summary
Admiral Group is a highly profitable, capital-efficient UK insurance provider that has successfully navigated recent cyclical claims inflation to deliver record profits. Trading at GBX 3214, the stock sits below our fair value estimate of GBX 3450-3700 (representing 7-15% upside), making it worth considering for new positions. The attractive 13.3x P/E and 5.0% yield offer a compelling entry point for dividend investors seeking quality financial exposure.
Sector Context
Admiral Group operates primarily as a direct-to-consumer insurance provider, specializing in motor and household policies without expensive traditional agency networks. In the insurance sector, companies collect premiums upfront and pay claims later, which naturally generates significant float; however, they are highly sensitive to temporary cyclical spikes in claims inflation and regulatory changes (like the Ogden discount rate).
Temporary Opportunity Identified
Historical dividend cuts (2022-2023) and recent margin pressures were driven by a temporary industry-wide spike in cyclical claims inflation and the non-recurrence of special dividends. The company has since repriced its premiums and recently achieved record profits.
📊 Strategy Analysis
- • Trading at an attractive valuation with a P/E of 13.3x and a solid 5.0% trailing dividend yield, sitting comfortably in the strategy's sweet spot.
- • Exceptional capital efficiency demonstrated by an outstanding 53.0% Return on Equity (ROE) and strong long-term revenue growth (+18.5% 10-year CAGR).
- • Successfully navigated recent cyclical claims inflation, with the business reporting record 2025 profits and prompting recent analyst upgrades.
- • Very secure balance sheet with a Net Debt/EBITDA ratio of 1.42x, well below the 3.0x risk threshold.
⚠ What to Watch
- • Free Cash Flow currently covers only 0.91x of the dividend (Cash Flow Payout of 98.45%), suggesting cash flow timing is tight relative to payouts.
- • History of headline dividend volatility, including significant reductions in 2022 and 2023, primarily driven by the cyclical nature of claims and the company's historical reliance on special dividends.
- • Potential strategic transition away from special dividends toward share buybacks could reduce the headline cash payout specifically for income-focused investors.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.