Highlights

  • Heritage Insurance shows 101.83% one-year basic EPS growth, P/E of 5.25 and PEG of 0.00.
  • Second quarter net income was $61.7 million, or $2.05 per diluted share.
  • Net combined ratio was 64.9% in the second quarter, against 72.9%.
  • Heritage repurchased 1,001,508 shares for about $24.6 million in six months; $37.4 million remains.

Basic earnings per share growth of 101.83% over one year, a trailing twelve-month P/E of 5.25 and a PEG of 0.00 on an expected basis define Heritage Insurance (NYSE:HRTG) as an undervalued growth stock, with shares trading at USD 35.06 on October 28, 2026, down 3.18%. Alongside those figures, the super-regional property and casualty insurer established a $50.0 million share repurchase plan on May 7, placed its 2026-2027 catastrophe excess of loss reinsurance program effective June 1, and reported second quarter 2026 net income of $61.7 million in its August 7 quarterly report.

Based in Tampa, Florida, and incorporated in Delaware, Heritage Insurance Holdings is a property and casualty insurance holding company that describes itself as a super-regional insurer that primarily provides personal and commercial residential insurance across a multi-state footprint, including commercial insurance in Texas on an excess and surplus lines basis. It calls itself vertically integrated, controlling or managing risk management, underwriting, claims, actuarial rate making, customer service and distribution, and it reports one segment, residential property insurance.

Growth: Second Quarter Net Income, Premiums and Combined Ratio

Net income was $61.7 million in the second quarter of 2026 against $48.0 million a year earlier, and $98.2 million for the six months against $78.5 million. Basic earnings per share were $2.06 against $1.55 for the quarter and $3.24 against $2.54 for the six months, while diluted earnings per share were $2.05 against $1.55 and $3.23 against $2.54. The company said the quarterly increase was primarily due to lower losses and higher revenue, with revenue reflecting lower ceded premiums and higher investment income.

Total revenue rose 3.0% to $214.2 million, and net premiums earned rose 2.4% to $201.1 million from $196.3 million. Losses and loss adjustment expenses were $61.1 million against $75.6 million, including net prior-year loss development of $23.4 million in favor against $2.3 million. The net loss ratio was 30.4% against 38.5%, the net expense ratio was 34.5% against 34.4%, and the net combined ratio was 64.9% against 72.9%.

Valuation: P/E of 5.25, PEG of 0.00 and Management Commentary

The P/E ratio of 5.25 is measured on trailing twelve-month earnings, and the PEG ratio of 0.00 is on an expected basis. Net cash provided by operating activities was $166.6 million for the six months against $44.1 million. Total shareholders' equity was $567.7 million at June 30, 2026, against $505.3 million at December 31, 2025.

On the second quarter call, Chief Executive Officer Ernesto Garateix said the company does not believe its current valuation fully reflects its operating performance, the consistency of its earnings or the durability of its business. He added that share repurchases will remain part of capital allocation for as long as that disconnect exists.

Capital Returns, Debt and Liquidity

Under the $50.0 million plan, which runs through December 31, 2026, the company repurchased 554,624 shares for approximately $12.6 million at an average price of $22.69 from May 7 through June 30, leaving $37.4 million of capacity. Treasury stock repurchases totaled approximately $24.6 million for 1,001,508 shares in the first six months. The board declared no dividends in the three and six months ended June 30, 2026.

Cash and cash equivalents were $587.6 million and investments were $804.0 million at June 30, 2026, against $559.3 million and $715.6 million at December 31, 2025. The Term Loan Facility had $72.2 million outstanding, a $75 million delayed draw term loan remains available for permitted acquisitions and investments, and the company stated it complied with all covenants under its credit agreement.

Disclosed Risks and Outlook

Gross premiums written fell 5.5% to $388.4 million from $411.0 million, primarily on lower commercial residential premiums amid competitive conditions in Florida. Policies in force were 350,887 against 370,109, down 5.2%, and commercial residential premiums in force fell 12.7%. Policy acquisition costs rose 5.5%, which the company tied to lower ceding commissions.

The company lists concentration in coastal states and exposure to hurricanes and wildfires among its risks, and noted that Hurricanes Irma, Ian and Milton triggered its Florida Hurricane Catastrophe Fund coverage. Inflation in labor and materials may continue to raise claim costs, and the credit agreement may limit dividends and repurchases.

The company said commercial premiums are expected to level off in the second half of 2026. Its catastrophe excess of loss placement generated treaty-year expense savings of $63.2 million, of which seven-twelfths will be recognized in 2026, and the company expects a lower ceded premium over the next four quarters. On the call, management said the Guidewire rollout has temporarily slowed production and that it expects the ceded premium ratio to fall by 1 to 2 points in the third quarter of 2026.