International General Insurance Holdings (IGIC) has drawn fresh attention after its board approved a 50% increase in the quarterly dividend to $0.075 per share. This change will be effective for shareholders of record on May 28, 2026.

The stock’s recent 1 day share price return declined 2.3% to $25.31. However, the 1 year total shareholder return of 16.0% and very large 3 and 5 year total shareholder returns suggest momentum has been building over a multi year period as the market reassesses earnings strength, dividend growth and perceived risk.

If this dividend move has you thinking more broadly about income and growth ideas, it could be worth scanning for other opportunities using the 20 top founder-led companies

With IGIC trading at $25.31 against a $30.00 analyst price target and an indicated intrinsic discount of 35.1%, the key question is whether the stock is genuinely cheap or if the market already reflects potential future growth.

Price-to-Earnings of 8.8x: Is it justified?

On a simple snapshot, International General Insurance Holdings trades on a P/E of 8.8x, which screens as undervalued compared to both its peers and the wider US insurance sector at the current $25.31 share price.

The P/E ratio compares the share price with earnings per share, so a lower figure can suggest the market is paying less for each dollar of profit. For an insurer like IGIC, this often reflects how investors feel about the stability of profits, the quality of underwriting and the outlook for future earnings.

Here, the picture is mixed. IGIC has high quality earnings and a strong 5 year earnings growth record of 22.6% per year, yet earnings declined 1.4% over the past year and are expected to grow at 2.6% per year, which is slower than the wider US market forecast of 16.8% per year. The current 8.8x P/E is below the estimated fair P/E of 11.2x, which suggests the market could be assigning a lower multiple than that fair level.

Against peers, the discount is clear. IGIC's 8.8x P/E compares with an 11.9x peer average and an 11.3x US insurance industry average, indicating investors are pricing its earnings more conservatively than the sector overall while fundamentals such as high quality earnings and improved net profit margins are in place.

Alongside the multiples view, our DCF model estimate of $39.01 per share indicates IGIC is trading below an assessment of future cash flow value. A discounted cash flow model projects future cash flows and discounts them back to today using a required rate of return, which can help frame what investors are implicitly assuming about long term profitability.

For an insurer with specialty lines across multiple regions, this type of model can be useful for stress testing how sensitive value is to changes in earnings growth and profitability, rather than relying only on headline ratios tied to a single year of results.

Result: Price-to-Earnings of 8.8x (UNDERVALUED)

However, investors still need to weigh earnings growth slowing to 2.6% per year, as well as the risk that specialty insurance and reinsurance markets become more competitive.

Another angle on IGIC's valuation

While the 8.8x P/E looks attractive against peers and the fair ratio of 11.2x, the SWS DCF model points to a different magnitude of potential upside, with a future cash flow value estimate of $39.01 per share versus the current $25.31. That gap raises a simple question for you: is the market being cautious or too pessimistic?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out International General Insurance Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 48 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Given the mix of cautious signals and potential rewards in this story, it makes sense to move quickly and check the underlying data yourself, then weigh the 2 key rewards and 1 important warning sign.

Looking for more investment ideas?

If IGIC has sparked your interest, do not stop here, broaden your watchlist with a few focused stock ideas that could sharpen your next move.

• Target reliability first by checking out 69 resilient stocks with low risk scores that put balance sheet strength and lower risk profiles at the center of your research.
• Hunt for quality at a reasonable price by scanning 48 high quality undervalued stocks that pair solid fundamentals with appealing valuations.
• Pinpoint resilient cash generators by reviewing the solid balance sheet and fundamentals stocks screener (46 results) that emphasise stronger finances and the capacity to support future plans.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.