Head-To-Head Comparison: Atlas Financial Holdings (AFH) vs. Fanhua (FANH)

Atlas Financial Holdings (NASDAQ: AFH) and Fanhua (NASDAQ:FANH) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, earnings, valuation and dividends.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Atlas Financial Holdings and Fanhua, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlas Financial Holdings 0 0 3 0 3.00
Fanhua 0 0 0 0 N/A

Atlas Financial Holdings presently has a consensus price target of $18.50, indicating a potential downside of 7.04%. Given Atlas Financial Holdings’ higher possible upside, analysts plainly believe Atlas Financial Holdings is more favorable than Fanhua.

Dividends

Fanhua pays an annual dividend of $0.10 per share and has a dividend yield of 0.4%. Atlas Financial Holdings does not pay a dividend. Fanhua pays out 10.6% of its earnings in the form of a dividend.

Profitability

This table compares Atlas Financial Holdings and Fanhua’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlas Financial Holdings 0.92% -2.57% -0.78%
Fanhua 7.84% 11.29% 8.96%

Volatility and Risk

Atlas Financial Holdings has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, Fanhua has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500.

Institutional and Insider Ownership

80.3% of Atlas Financial Holdings shares are held by institutional investors. Comparatively, 15.3% of Fanhua shares are held by institutional investors. 12.7% of Atlas Financial Holdings shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Atlas Financial Holdings and Fanhua’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Atlas Financial Holdings $177.58 million 1.35 $2.64 million $0.14 142.15
Fanhua $677.03 million 1.99 $22.61 million $0.94 24.57

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

Summary

Fanhua beats Atlas Financial Holdings on 9 of the 14 factors compared between the two stocks.

Atlas Financial Holdings Company Profile

Atlas Financial Holdings Inc formerly JJR VI Acquisition Corp is a Canada-based company. It is engaged in the business of providing commercial automobile insurance in the United States with a niche market orientation. The Company’s automobile insurance products provide coverage in three areas: liability, accident benefits and physical damage. Liability insurance provides coverage where the insured is responsible for an automobile accident, for the payment for injuries and property damage to third parties. Accident benefit policies or personal injury protection policies provide coverage for loss of income, medical and rehabilitation expenses for insured persons who are injured in an automobile accident, Physical damage coverages provide for the payment of damages to an insured automobile arising from a collision with another object or from other risks. In January 2013, the Company acquired Camelot Services Inc. and its insurance subsidiary, Gateway Insurance Company.

Fanhua Company Profile

Fanhua Inc., formerly CNinsure Inc., is an independent online-to-offline financial services provider in China. The Company distributes a range of property, casualty and life insurance products underwritten by domestic and foreign insurance companies operating in China to individual and institutional customers, and provides insurance claims adjusting services. Its segments include insurance agency, which provides a range of property, casualty and life insurance products to individual customers; insurance brokerage, which provides commercial lines of property and casualty insurance, group life insurance programs and risk management consulting services to businesses and reinsurance brokerage services to insurance companies, and claims adjusting, which provides claims adjusting services to self-insured entities or insurance companies that choose to outsource some or all of their claims adjustment functions. The Company’s distribution and service network covers over 29 provinces in China.

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