Critical Review: Security National Financial (SNFCA) versus Atlantic American (AAME)

Atlantic American (NASDAQ: AAME) and Security National Financial (NASDAQ:SNFCA) are both small-cap finance companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Risk and Volatility

Atlantic American has a beta of 0.43, suggesting that its stock price is 57% less volatile than the S&P 500. Comparatively, Security National Financial has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and price targets for Atlantic American and Security National Financial, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atlantic American 0 0 0 0 N/A
Security National Financial 0 0 0 0 N/A

Earnings and Valuation

This table compares Atlantic American and Security National Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atlantic American $166.08 million 0.45 $2.63 million $0.14 26.07
Security National Financial $307.21 million 0.26 $12.18 million $0.44 11.45

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

Institutional and Insider Ownership

5.2% of Atlantic American shares are held by institutional investors. Comparatively, 8.5% of Security National Financial shares are held by institutional investors. 79.3% of Atlantic American shares are held by insiders. Comparatively, 18.2% of Security National Financial 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.

Profitability

This table compares Atlantic American and Security National Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atlantic American 1.93% -0.28% -0.09%
Security National Financial 2.37% 5.03% 0.70%

Dividends

Atlantic American pays an annual dividend of $0.02 per share and has a dividend yield of 0.5%. Security National Financial does not pay a dividend. Atlantic American pays out 14.3% of its earnings in the form of a dividend.

Summary

Security National Financial beats Atlantic American on 8 of the 13 factors compared between the two stocks.

About Atlantic American

Atlantic American Corporation is a holding company that operates through its subsidiaries in specialty markets within the life and health, and property and casualty insurance industries. The Company’s principal operating subsidiaries are American Southern Insurance Company and American Safety Insurance Company (together known as American Southern) within the property and casualty insurance industry, and Bankers Fidelity Life Insurance Company and Bankers Fidelity Assurance Company (together known as Bankers Fidelity) within the life and health insurance industry. Each of American Southern and Bankers Fidelity is managed separately based upon the type of products it offers. American Southern’s product lines include business automobile insurance policies, General Liability Insurance policies, Property Insurance policies and Surety Bonds. Products offered by Bankers Fidelity include ordinary and term life insurance, Medicare supplement and other accident and health insurance products.

About Security National Financial

Security National Financial Corporation is a holding company. The Company operates through three segments: life insurance, cemetery and mortuary, and mortgage loans. The life insurance segment is engaged in the business of selling and servicing selected lines of life insurance, annuity products, and accident and health insurance. The cemetery and mortuary segment consists of approximately seven mortuaries and five cemeteries in the state of Utah and a cemetery in the state of California. The mortgage loan segment originates and underwrites or otherwise purchases residential and commercial loans for new construction, existing homes and real estate projects. The Company is also engaged in pre-need selling of funeral, cemetery, mortuary and cremation services through its Utah and California operations. It also sells pre-need funeral, cemetery and cremation services.

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