Old Republic International Corporation (NYSE: ORI) and United Fire Group (NASDAQ:UFCS) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.
Risk & Volatility
Old Republic International Corporation has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500. Comparatively, United Fire Group has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500.
This is a summary of recent ratings for Old Republic International Corporation and United Fire Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Old Republic International Corporation||0||0||0||0||N/A|
|United Fire Group||0||2||1||0||2.33|
United Fire Group has a consensus price target of $46.33, suggesting a potential downside of 0.06%. Given United Fire Group’s higher possible upside, analysts clearly believe United Fire Group is more favorable than Old Republic International Corporation.
Institutional and Insider Ownership
71.2% of Old Republic International Corporation shares are owned by institutional investors. Comparatively, 58.2% of United Fire Group shares are owned by institutional investors. 2.3% of Old Republic International Corporation shares are owned by company insiders. Comparatively, 5.8% of United Fire Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This table compares Old Republic International Corporation and United Fire Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Old Republic International Corporation||7.64%||9.41%||2.26%|
|United Fire Group||4.07%||4.33%||1.01%|
Old Republic International Corporation pays an annual dividend of $0.76 per share and has a dividend yield of 3.9%. United Fire Group pays an annual dividend of $1.12 per share and has a dividend yield of 2.4%. Old Republic International Corporation pays out 47.8% of its earnings in the form of a dividend. United Fire Group pays out 61.2% 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. United Fire Group has raised its dividend for 35 consecutive years. Old Republic International Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
Earnings & Valuation
This table compares Old Republic International Corporation and United Fire Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Old Republic International Corporation||$5.99 billion||0.86||$758.60 million||$1.59||12.33|
|United Fire Group||$1.16 billion||1.00||$59.36 million||$1.83||25.33|
Old Republic International Corporation has higher revenue and earnings than United Fire Group. Old Republic International Corporation is trading at a lower price-to-earnings ratio than United Fire Group, indicating that it is currently the more affordable of the two stocks.
Old Republic International Corporation beats United Fire Group on 9 of the 16 factors compared between the two stocks.
About Old Republic International Corporation
Old Republic International Corporation is a holding company. The Company is engaged in business of insurance underwriting and related services. The Company conducts its operations through various regulated insurance company subsidiaries, which are organized into three segments: General Insurance Group, Title Insurance Group and the Republic Financial Indemnity Group (RFIG) Run-off Business. The Company’s General Insurance segment consists of property and liability insurance, and offers coverages to businesses, government and other institutions. The Company’s Title Insurance Group business consists of the issuance of policies to real estate purchasers and investors based upon searches of the public records, which contain information concerning interests in real property. The Company’s RFIG run-off business consists of its mortgage guaranty and consumer credit indemnity (CCI) operations.
About United Fire Group
United Fire Group, Inc., formerly United Fire & Casualty Company, is engaged in the business of writing property and casualty insurance and life insurance and selling annuities. The Company operates in two segments: property and casualty insurance, and life insurance. The Company’s property and casualty insurance segment consists of commercial lines insurance, including surety bonds, personal lines insurance and assumed insurance. Its life insurance segment consists of deferred and immediate annuities, universal life insurance products and traditional life insurance products. Its life insurance segment consists solely of the operations of United Life Insurance Company. On February 1, 2012, the Company completed a holding company reorganization of United Fire Group, Inc., United Fire & Casualty Company and UFC MergeCo, Inc. On March 28, 2011, the Company acquired Mercer Insurance Group, Inc. (Mercer Insurance Group).
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