Selective Insurance Group (SIGI) & United Insurance (UIHC) Financial Analysis

Selective Insurance Group (NASDAQ: SIGI) and United Insurance (NASDAQ:UIHC) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Analyst Recommendations

This is a breakdown of current ratings for Selective Insurance Group and United Insurance, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Selective Insurance Group 0 4 0 0 2.00
United Insurance 0 1 2 1 3.00

Selective Insurance Group currently has a consensus target price of $50.91, suggesting a potential downside of 11.99%. United Insurance has a consensus target price of $18.67, suggesting a potential upside of 13.06%. Given United Insurance’s stronger consensus rating and higher possible upside, analysts plainly believe United Insurance is more favorable than Selective Insurance Group.

Dividends

Selective Insurance Group pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. United Insurance pays an annual dividend of $0.24 per share and has a dividend yield of 1.5%. Selective Insurance Group pays out 23.9% of its earnings in the form of a dividend. United Insurance pays out -30.0% 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 Insurance is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation & Earnings

This table compares Selective Insurance Group and United Insurance’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Selective Insurance Group $2.28 billion 1.48 $158.49 million $3.01 19.22
United Insurance $487.12 million 1.45 $5.69 million ($0.80) -20.64

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

Institutional and Insider Ownership

77.8% of Selective Insurance Group shares are owned by institutional investors. Comparatively, 31.5% of United Insurance shares are owned by institutional investors. 3.0% of Selective Insurance Group shares are owned by insiders. Comparatively, 22.6% of United Insurance shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Selective Insurance Group and United Insurance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Selective Insurance Group 7.36% 11.00% 2.37%
United Insurance -4.54% -2.29% -0.58%

Volatility and Risk

Selective Insurance Group has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500. Comparatively, United Insurance has a beta of 1.53, suggesting that its stock price is 53% more volatile than the S&P 500.

Summary

Selective Insurance Group beats United Insurance on 9 of the 17 factors compared between the two stocks.

Selective Insurance Group Company Profile

Selective Insurance Group, Inc. is a holding company. As of December 31, 2016, the Company had 10 insurance subsidiaries, nine of which were licensed by various state departments of insurance to write specific lines of property and casualty insurance business. The remaining subsidiary is authorized by various state insurance departments to write property and casualty insurance in the excess and surplus lines (E&S) market. Its segments include Standard Commercial Lines, which consists of insurance products and services provided in the standard marketplace; Standard Personal Lines, which consists of insurance products and services, including flood insurance coverage that it writes through the National Flood Insurance Program (NFIP); E&S Lines, which consists of insurance products and services provided to customers not obtaining coverage in the standard marketplace, and investment segment invests insurance premiums, as well as amounts generated through its capital management strategies.

United Insurance Company Profile

United Insurance Holdings Corp. is a property and casualty insurance holding company that sources, writes and services residential property and casualty insurance policies using a network of agents and a group of insurance subsidiaries. The Company’s insurance subsidiary is United Property & Casualty Insurance Company. Its other subsidiaries include United Insurance Management, L.C., the managing general agent that manages substantially all aspects of United Property & Casualty Insurance Company’s business; Skyway Claims Services, LLC, which provides services to its insurance affiliate; UPC Re, which provides a portion of the reinsurance protection purchased by its insurance affiliate. The Company’s principal product is homeowners’ insurance, which it offers in Connecticut, Florida, Georgia, Hawaii, Louisiana, Massachusetts, New Jersey, North Carolina, Rhode Island, South Carolina and Texas.

Receive News & Ratings for Selective Insurance Group Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Selective Insurance Group and related companies with MarketBeat.com's FREE daily email newsletter.

Comments

Leave a Reply


share news on Facebook
tweet this investment news
share on linkedin
share on StockTwits
share on Google Plus
share on reddit