Selective Insurance Group (NASDAQ: SIGI) and National Interstate (NASDAQ:NATL) are both financials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, dividends, risk, institutional ownership and valuation.
Selective Insurance Group pays an annual dividend of $0.64 per share and has a dividend yield of 1.3%. National Interstate pays an annual dividend of $0.56 per share and has a dividend yield of 1.7%. Selective Insurance Group pays out 22.2% of its earnings in the form of a dividend. National Interstate pays out 40.6% 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.
Risk & Volatility
Selective Insurance Group has a beta of 1.44, meaning that its share price is 44% more volatile than the S&P 500. Comparatively, National Interstate has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500.
This is a breakdown of current recommendations and price targets for Selective Insurance Group and National Interstate, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Selective Insurance Group||0||4||0||0||2.00|
Selective Insurance Group currently has a consensus price target of $46.91, suggesting a potential downside of 5.51%. Given Selective Insurance Group’s higher probable upside, equities research analysts clearly believe Selective Insurance Group is more favorable than National Interstate.
Earnings and Valuation
This table compares Selective Insurance Group and National Interstate’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Selective Insurance Group||$2.38 billion||1.22||$313.01 million||$2.88||17.24|
Selective Insurance Group has higher revenue and earnings than National Interstate. Selective Insurance Group is trading at a lower price-to-earnings ratio than National Interstate, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
77.6% of Selective Insurance Group shares are held by institutional investors. Comparatively, 84.9% of National Interstate shares are held by institutional investors. 3.0% of Selective Insurance Group shares are held by company insiders. Comparatively, 11.8% of National Interstate shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
This table compares Selective Insurance Group and National Interstate’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Selective Insurance Group||6.73%||10.24%||2.23%|
Selective Insurance Group beats National Interstate on 8 of the 11 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 National Interstate
National Interstate Corporation and its subsidiaries operate as an insurance holding company that underwrites and sells traditional and alternative property and casualty insurance products to the passenger transportation, trucking and moving and storage industries, general commercial insurance to small businesses in Hawaii and Alaska and personal insurance to owners of recreational vehicles throughout the United States. The Company is a specialty property and casualty insurance company with a focus on the transportation industry. The Company operates through property and casualty insurance segment. The Company offers approximately 40 product lines in the specialty property and casualty insurance market, which it groups into approximately four general business components: alternative risk transfer (ART), transportation, specialty personal lines, and Hawaii and Alaska based on the class of business, insureds’ risk participation or geographic location.
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