United Fire Group (NASDAQ: UFCS) and Loews (NYSE:L) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, institutional ownership, earnings, profitability, valuation and risk.
Volatility and Risk
United Fire Group has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Loews has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.
Institutional and Insider Ownership
58.4% of United Fire Group shares are owned by institutional investors. Comparatively, 59.4% of Loews shares are owned by institutional investors. 5.8% of United Fire Group shares are owned by insiders. Comparatively, 11.8% of Loews shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
United Fire Group pays an annual dividend of $1.12 per share and has a dividend yield of 2.4%. Loews pays an annual dividend of $0.25 per share and has a dividend yield of 0.5%. United Fire Group pays out 177.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Loews pays out 8.7% of its earnings in the form of a dividend.
This table compares United Fire Group and Loews’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|United Fire Group||1.49%||1.32%||0.30%|
This is a breakdown of current ratings and price targets for United Fire Group and Loews, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|United Fire Group||0||2||1||0||2.33|
United Fire Group presently has a consensus target price of $46.33, indicating a potential downside of 2.66%. Loews has a consensus target price of $35.00, indicating a potential downside of 29.65%. Given United Fire Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe United Fire Group is more favorable than Loews.
Earnings & Valuation
This table compares United Fire Group and Loews’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|United Fire Group||$1.14 billion||1.04||$49.90 million||$0.63||75.56|
|Loews||$13.11 billion||1.28||$654.00 million||$2.88||17.27|
Loews has higher revenue and earnings than United Fire Group. Loews is trading at a lower price-to-earnings ratio than United Fire Group, indicating that it is currently the more affordable of the two stocks.
Loews beats United Fire Group on 11 of the 16 factors compared between the two stocks.
About United Fire Group
United Fire Group, Inc., formerly United Fire & Casualty Company, is engaged in the business of writing property and casualty insurance and life insurance and selling annuities. The Company operates in two segments: property and casualty insurance, and life insurance. The Company’s property and casualty insurance segment consists of commercial lines insurance, including surety bonds, personal lines insurance and assumed insurance. Its life insurance segment consists of deferred and immediate annuities, universal life insurance products and traditional life insurance products. Its life insurance segment consists solely of the operations of United Life Insurance Company. On February 1, 2012, the Company completed a holding company reorganization of United Fire Group, Inc., United Fire & Casualty Company and UFC MergeCo, Inc. On March 28, 2011, the Company acquired Mercer Insurance Group, Inc. (Mercer Insurance Group).
Loews Corporation is a holding company. The Company, through its subsidiaries, is engaged in commercial property and casualty insurance; operation of offshore oil and gas drilling rigs; transportation and storage of natural gas and natural gas liquids, and operation of a chain of hotels. The Company has five segments consisted of its four individual operating subsidiaries, CNA Financial Corporation (CNA), Diamond Offshore Drilling, Inc. (Diamond Offshore), Boardwalk Pipeline Partners, LP (Boardwalk Pipeline) and Loews Hotels Holding Corporation (Loews Hotels), and the Corporate segment. CNA’s insurance products include commercial property and casualty coverages, including surety. CNA’s services include risk management, information services, warranty and claims administration. CNA’s core business, commercial property and casualty insurance operations include Specialty, Commercial and International lines of business.
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