With Strong Cash Flow, Ryan Specialty Stock Poised to Rise?

Ryan Specialty (RYAN) could be a good pick for your portfolio, with its high cash yield, good fundamentals, and discounted valuation. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market

What Is Happening With RYAN

RYAN may be down -18% so far this year but is now trading at P/S (Price-to-Sales) ratio that is at a meaningful discount to its 3-month and 2-year highs, and also belowits 3-year average.

The stock may not reflect it yet, but here is what’s going well for the company. Ryan Specialty delivered strong top-line growth in 2025, driven by strategic acquisitions contributing significantly to revenue and robust performance in casualty lines. New client wins and expanded existing relationships fueled organic growth, despite a challenging property market with accelerating rate reductions. The company also expanded its delegated underwriting authority platform with new ventures and enhanced offerings, supported by fresh capital for its reinsurance vehicle. Full-year organic growth guidance was adjusted to 9-11% to reflect property market headwinds.

RYAN Has Good Fundamentals

• Good Cash Yield: Not many stocks offer free cash flow yield of 8.5%, but Ryan Specialty stock does
• Strong Margin: Last 12 month operating margin of 0.0%
• Growth: Last 12 revenue growth of 24.3% – low growth, but this selection is all about high yield and margin
• Valuation: RYAN stock currently trading at 31% below 2Y high, 10% below 1M high, and at a PS lower than 3Y average.

Below is a quick comparison of RYAN fundamentals with S&P medians.

*LTM: Last Twelve Months

But What Is The Risk Involved?

While RYAN stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. Ryan missed the mark by dropping 30% during the 2022 inflation shock. It’s a relatively smaller dip compared to bigger crashes, but it still shows the stock isn’t immune to sudden market selloffs. Even with strong fundamentals, sharp downturns can push shares down significantly. So, while Ryan might look solid on paper, its past action during shocks suggests risk remains when volatility hits.

For more details and our view, see Buy or Sell RYAN Stock.

Stocks Like RYAN

Not ready to act on RYAN? Consider these alternatives:

1. GLOBALFOUNDRIES (GFS)
2. Vail Resorts (MTN)
3. Qualys (QLYS)

We chose these stocks using the following criteria:

1. Greater than $2 Bil in market cap
2. Dipped last month & meaningfully below 2Y high
3. Current P/S < last few year average
4. Strong operating margin with no instances of large margin collapse
5. High free cash flow yield

A portfolio of stocks with the criteria above would have performed has follows since 12/31/2016:

• Average 6-month and 12-month forward returns of 10.4% and 20.4% respectively
• Win rate (percentage of picks returning positive) of about 74% for 12-month period
• Strategy consistent across market cycles

Portfolios Over Individual Stock Picks

Individual picks can be volatile but staying invested is what matters. A diversified portfolio helps you stay the course, capture upside and reduce downside

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.