Montpelier Re (NYSE: MRH) and State National Companies (NASDAQ:SNC) are both small-cap property & casualty insurance – nec companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, dividends, earnings, institutional ownership and analyst recommendations.
State National Companies pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Montpelier Re does not pay a dividend. State National Companies pays out 19.2% of its earnings in the form of a dividend.
This table compares Montpelier Re and State National Companies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|State National Companies||23.91%||18.02%||1.72%|
This is a summary of current ratings for Montpelier Re and State National Companies, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|State National Companies||1||2||4||0||2.43|
State National Companies has a consensus target price of $59.50, suggesting a potential upside of 183.06%. Given State National Companies’ higher possible upside, analysts plainly believe State National Companies is more favorable than Montpelier Re.
Insider & Institutional Ownership
58.6% of State National Companies shares are held by institutional investors. 34.8% of State National Companies shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Montpelier Re and State National Companies’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|State National Companies||$217.07 million||4.08||$49.07 million||$1.25||16.82|
State National Companies has higher revenue and earnings than Montpelier Re. Montpelier Re is trading at a lower price-to-earnings ratio than State National Companies, indicating that it is currently the more affordable of the two stocks.
State National Companies beats Montpelier Re on 8 of the 12 factors compared between the two stocks.
About Montpelier Re
Montpelier RE Holdings Ltd. is a holding company. The Company provides customized insurance and reinsurance solutions to the global market. Through its affiliates in Bermuda, it provides institutional and retail investors with direct access to the global property reinsurance market. It operates in three segments: Montpelier Bermuda, which consists of the assets and operations of Montpelier Reinsurance Ltd., which is its wholly owned operating subsidiary based in Pembroke, Bermuda and is registered as a Bermuda Class four insurer; Montpelier at Lloyd’s, which consists of the assets and operations of Montpelier Syndicate 5151, Montpelier Capital Limited, Montpelier at Lloyd’s Limited, Montpelier Underwriting Services Limited and Montpelier Underwriting Inc., and Collateralized Reinsurance, which is marketed under the name Blue Capital. Blue Capital is an asset management platform offering property catastrophe reinsurance-linked investment products to institutional and retail investors.
About State National Companies
State National Companies, Inc. is a specialty provider of property and casualty insurance. The Company’s segments include Program Services, Lender Services and Corporate. In the Program Services segment, the Company operates an issuing carrier (fronting) business to provide insurance capacity access to the United States property and casualty insurance markets. In the Lender Services segment, the Company specializes in providing collateral protection insurance, which insures automobiles held as collateral for loans made by financial institutions. The Company writes its insurance business through its insurance company subsidiaries, which include State National Insurance Company, Inc. (SNIC), National Specialty Insurance Company (NSIC) and United Specialty Insurance Company (USIC). As of December 31, 2016, SNIC and NSIC were admitted carriers licensed to write property and casualty business in all 50 states and the District of Columbia. USIC is an admitted carrier in Delaware.
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