Emergent Capital (EMGC) and FBL Financial Group (FFG) Critical Review

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

Dividends

FBL Financial Group pays an annual dividend of $1.76 per share and has a dividend yield of 2.3%. Emergent Capital does not pay a dividend. FBL Financial Group pays out 39.2% of its earnings in the form of a dividend. Emergent Capital has raised its dividend for 4 consecutive years.

Profitability

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

Net Margins Return on Equity Return on Assets
Emergent Capital -42.49% -12.80% -3.98%
FBL Financial Group 15.30% 8.93% 1.12%

Valuation & Earnings

This table compares Emergent Capital and FBL Financial Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Emergent Capital $1.12 million 52.90 -$49.68 million N/A N/A
FBL Financial Group $726.41 million 2.62 $107.22 million $4.49 16.99

FBL Financial Group has higher revenue and earnings than Emergent Capital.

Insider & Institutional Ownership

27.7% of FBL Financial Group shares are held by institutional investors. 33.3% of Emergent Capital shares are held by company insiders. Comparatively, 0.6% of FBL Financial Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Emergent Capital has a beta of 0.02, suggesting that its stock price is 98% less volatile than the S&P 500. Comparatively, FBL Financial Group has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Emergent Capital and FBL Financial Group, as provided by MarketBeat.com.

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

Summary

FBL Financial Group beats Emergent Capital on 8 of the 14 factors compared between the two stocks.

Emergent Capital Company Profile

Emergent Capital, Inc., formerly Imperial Holdings, Inc., is a specialty finance company that invests in asset classes, primarily life settlements. The Company, through its subsidiary companies, owns a portfolio of approximately 630 life insurance policies (life settlements). The Company purchases individual policies and portfolios of life insurance policies and manages those assets based on actuarial and market data. The Company provides customized liquidity solutions to owners of illiquid financial assets in two markets, which include life finance and structured settlements. The Company focuses on lending to outright purchases of portfolios, to tertiary trades, as well as individual secondary market purchases. The Company invests in short and long-term life settlement investments.

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.

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