Head-To-Head Comparison: Primerica (PRI) & Atlantic American Corporation (NASDAQ:AAME)

Atlantic American Corporation (NASDAQ: AAME) and Primerica (NYSE:PRI) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, risk, earnings, profitabiliy, valuation, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

5.1% of Atlantic American Corporation shares are owned by institutional investors. Comparatively, 97.2% of Primerica shares are owned by institutional investors. 79.3% of Atlantic American Corporation shares are owned by company insiders. Comparatively, 1.2% of Primerica shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Atlantic American Corporation and Primerica’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Atlantic American Corporation	0.90%	-0.93%	-0.31%
Primerica	14.49%	18.22%	1.95%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Atlantic American Corporation and Primerica, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atlantic American Corporation	0	0	0	0	N/A
Primerica	0	4	1	0	2.20

Primerica has a consensus target price of $84.67, suggesting a potential upside of 3.00%. Given Primerica’s higher possible upside, analysts clearly believe Primerica is more favorable than Atlantic American Corporation.

Volatility & Risk

Atlantic American Corporation has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500. Comparatively, Primerica has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Valuation and Earnings

This table compares Atlantic American Corporation and Primerica’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Atlantic American Corporation	$168.19 million	0.44	$4.70 million	$0.05	72.01
Primerica	$1.58 billion	2.37	$406.18 million	$4.77	17.23

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

Dividends

Atlantic American Corporation pays an annual dividend of $0.02 per share and has a dividend yield of 0.6%. Primerica pays an annual dividend of $0.76 per share and has a dividend yield of 0.9%. Atlantic American Corporation pays out 40.0% of its earnings in the form of a dividend. Primerica pays out 15.9% 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. Primerica has raised its dividend for 6 consecutive years. Primerica is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Primerica beats Atlantic American Corporation on 14 of the 15 factors compared between the two stocks.

Atlantic American Corporation Company Profile

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.

Primerica Company Profile

Primerica Inc. (Primerica) is a distributor of financial products to middle-income households in the United States and Canada. The Company operates through three segments: Term Life Insurance, Investment and Savings Products, and Corporate and Other Distributed Products. The Term Life Insurance segment includes underwriting profits on its in-force book of term life insurance policies, net of reinsurance, which are underwritten by its life insurance company subsidiaries. The Investment and Savings Products segment includes retail and managed mutual funds, and annuities distributed through licensed broker-dealer subsidiaries and includes segregated funds, an individual annuity savings product that it underwrites in Canada through Primerica Life Insurance Company of Canada (Primerica Life Canada). In the United States, it distributes mutual fund and annuity products of various third-party companies. It also earns fees for account servicing on a subset of the mutual funds it distributes.