Critical Contrast: FBL Financial Group (FFG) and AMERISAFE (AMSF)

FBL Financial Group (NYSE: FFG) and AMERISAFE (NASDAQ:AMSF) are both small-cap finance companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, dividends, risk, analyst recommendations and earnings.

Dividends

FBL Financial Group pays an annual dividend of $1.76 per share and has a dividend yield of 2.6%. AMERISAFE pays an annual dividend of $0.80 per share and has a dividend yield of 1.4%. FBL Financial Group pays out 38.2% of its earnings in the form of a dividend. AMERISAFE pays out 23.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. AMERISAFE has increased its dividend for 4 consecutive years.

Valuation and Earnings

This table compares FBL Financial Group and AMERISAFE’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
FBL Financial Group $736.38 million 2.33 $184.11 million $4.61 14.92
AMERISAFE $384.23 million 2.76 $95.81 million $3.43 16.15

FBL Financial Group has higher revenue and earnings than AMERISAFE. FBL Financial Group is trading at a lower price-to-earnings ratio than AMERISAFE, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

29.4% of FBL Financial Group shares are held by institutional investors. Comparatively, 99.7% of AMERISAFE shares are held by institutional investors. 0.6% of FBL Financial Group shares are held by company insiders. Comparatively, 2.2% of AMERISAFE shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for FBL Financial Group and AMERISAFE, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FBL Financial Group 0 1 0 0 2.00
AMERISAFE 0 0 1 0 3.00

AMERISAFE has a consensus price target of $64.00, suggesting a potential upside of 15.52%. Given AMERISAFE’s stronger consensus rating and higher possible upside, analysts plainly believe AMERISAFE is more favorable than FBL Financial Group.

Risk and Volatility

FBL Financial Group has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, AMERISAFE has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.

Profitability

This table compares FBL Financial Group and AMERISAFE’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FBL Financial Group 15.70% 9.12% 1.16%
AMERISAFE 17.17% 14.04% 4.32%

Summary

AMERISAFE beats FBL Financial Group on 12 of the 17 factors compared between the two stocks.

FBL Financial Group Company Profile

FBL Financial Group, Inc. sells individual life insurance and annuity products under the brand name of Farm Bureau Financial Services. The Company’s segments are Annuity Segment, which sells a variety of traditional annuity products; Life Insurance Segment, which sells a range of traditional and universal life insurance products, and Corporate and Other segment, which provides various support operations, corporate capital and other product lines. It also offers life and annuity products through its subsidiary, Greenfields Life Insurance Company. Its other subsidiaries support various functional areas and affiliates by providing investment advisory and marketing and distribution services. It manages all aspects of two Farm Bureau affiliated property-casualty insurance companies, Farm Bureau Property & Casualty Insurance Company and Western Agricultural Insurance Company.

AMERISAFE Company Profile

Amerisafe, Inc. is an insurance holding company. The Company is engaged in providing workers’ compensation insurance focused on small to mid-sized employers engaged in hazardous industries, principally construction, trucking, logging and lumber, manufacturing, and agriculture. It is engaged in underwriting the workers’ compensation exposures inherent in these industries. It provides coverage to employers under state and federal workers’ compensation laws. The Company’s workers’ compensation insurance policies provide benefits to injured employees for, temporary or permanent disability, death and medical and hospital expenses. The Company provides safety services at employers’ workplaces as a component of its underwriting process. It utilizes claims management practices. In addition to its voluntary workers’ compensation business, it underwrites workers’ compensation policies for employers assigned to the Company and assumes reinsurance premiums from mandatory pooling arrangements.

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