Selective Insurance Group (NASDAQ: SIGI) and Heritage Insurance (NYSE:HRTG) are both finance companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, institutional ownership, earnings, profitability and dividends.
Volatility and Risk
Selective Insurance Group has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500. Comparatively, Heritage Insurance has a beta of 1.3, suggesting that its stock price is 30% more volatile than the S&P 500.
This is a summary of current recommendations and price targets for Selective Insurance Group and Heritage Insurance, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Selective Insurance Group||0||3||0||0||2.00|
Selective Insurance Group presently has a consensus target price of $55.55, indicating a potential downside of 2.71%. Heritage Insurance has a consensus target price of $18.50, indicating a potential upside of 8.44%. Given Heritage Insurance’s stronger consensus rating and higher probable upside, analysts plainly believe Heritage Insurance is more favorable than Selective Insurance Group.
This table compares Selective Insurance Group and Heritage Insurance’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Selective Insurance Group||6.83%||11.11%||2.43%|
Selective Insurance Group pays an annual dividend of $0.72 per share and has a dividend yield of 1.3%. Heritage Insurance pays an annual dividend of $0.24 per share and has a dividend yield of 1.4%. Selective Insurance Group pays out 25.3% of its earnings in the form of a dividend. Heritage Insurance pays out 2,400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Earnings and Valuation
This table compares Selective Insurance Group and Heritage Insurance’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Selective Insurance Group||$2.47 billion||1.35||$168.90 million||$2.85||20.04|
|Heritage Insurance||$438.96 million||1.03||$33.86 million||$0.01||1,706.00|
Selective Insurance Group has higher revenue and earnings than Heritage Insurance. Selective Insurance Group is trading at a lower price-to-earnings ratio than Heritage Insurance, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
77.6% of Selective Insurance Group shares are held by institutional investors. Comparatively, 84.1% of Heritage Insurance shares are held by institutional investors. 3.0% of Selective Insurance Group shares are held by company insiders. Comparatively, 16.1% of Heritage Insurance shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Selective Insurance Group beats Heritage Insurance on 9 of the 16 factors compared between the two stocks.
About Selective Insurance Group
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.
About Heritage Insurance
Heritage Insurance Holdings, Inc. (Heritage Insurance) is a property and casualty insurance holding company. The Company provides personal and commercial residential insurance. Through its subsidiary, Heritage Property & Casualty Insurance Company (Heritage P&C), it provides personal residential insurance for single-family homeowners and condominium owners, rental property insurance and commercial residential insurance in the state of Florida and North Carolina. The Company is vertically integrated and controls or manages all aspects of insurance underwriting, customer service, actuarial analysis, distribution and claims processing and adjusting. The Company’s primary products are personal and commercial residential insurance, which it offers only in Florida. As of December 31, 2016, it marketed and wrote personal lines voluntary policies through a network of approximately 1,900 independent agents. It had 150,998 voluntary personal residential policies as of December 31, 2016.
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