Willis Towers Watson Public (NASDAQ:WTW) & United Fire Group (NASDAQ:UFCS) Critical Comparison

United Fire Group (NASDAQ:UFCS) and Willis Towers Watson Public (NASDAQ:WTW) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, profitability, risk, analyst recommendations, dividends, valuation and institutional ownership.

Valuation and Earnings

This table compares United Fire Group and Willis Towers Watson Public”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
United Fire Group	$1.39 billion	0.88	$118.19 million	$5.38	8.80
Willis Towers Watson Public	$9.71 billion	3.20	$1.60 billion	$16.39	20.53

Willis Towers Watson Public has higher revenue and earnings than United Fire Group. United Fire Group is trading at a lower price-to-earnings ratio than Willis Towers Watson Public, indicating that it is currently the more affordable of the two stocks.

Dividends

United Fire Group pays an annual dividend of $0.80 per share and has a dividend yield of 1.7%. Willis Towers Watson Public pays an annual dividend of $3.84 per share and has a dividend yield of 1.1%. United Fire Group pays out 14.9% of its earnings in the form of a dividend. Willis Towers Watson Public pays out 23.4% 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. Willis Towers Watson Public has increased its dividend for 8 consecutive years. United Fire Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares United Fire Group and Willis Towers Watson Public’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
United Fire Group	9.06%	14.50%	3.54%
Willis Towers Watson Public	15.22%	22.65%	6.00%

Institutional and Insider Ownership

62.7% of United Fire Group shares are held by institutional investors. Comparatively, 93.1% of Willis Towers Watson Public shares are held by institutional investors. 6.1% of United Fire Group shares are held by insiders. Comparatively, 0.4% of Willis Towers Watson Public shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for United Fire Group and Willis Towers Watson Public, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
United Fire Group	0	0	2	2	3.50
Willis Towers Watson Public	0	6	12	1	2.74

United Fire Group currently has a consensus price target of $51.50, suggesting a potential upside of 8.76%. Willis Towers Watson Public has a consensus price target of $370.11, suggesting a potential upside of 9.99%. Given Willis Towers Watson Public’s higher possible upside, analysts clearly believe Willis Towers Watson Public is more favorable than United Fire Group.

Risk & Volatility

United Fire Group has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500. Comparatively, Willis Towers Watson Public has a beta of 0.44, suggesting that its stock price is 56% less volatile than the S&P 500.

Summary

Willis Towers Watson Public beats United Fire Group on 12 of the 18 factors compared between the two stocks.

About United Fire Group

United Fire Group, Inc., together with its subsidiaries, provides property and casualty insurance for individuals and businesses in the United States. The company offers commercial and personal lines of property and casualty insurance; and reinsurance coverage for property and casualty insurance. Its commercial lines include fire and allied lines, other liability, automobile, workers’ compensation, fidelity and surety coverage, and other insurance products; and personal lines comprise automobile, and fire and allied lines coverage, including homeowners, as well as provides assumed reinsurance products. The company sells its products through a network of independent agencies. United Fire Group, Inc. was incorporated in 1946 and is headquartered in Cedar Rapids, Iowa.

About Willis Towers Watson Public

Willis Towers Watson Public Limited Company operates as an advisory, broking, and solutions company worldwide. It operates through two segments: Health, Wealth & Career and Risk & Broking. The company offers strategy and design consulting, plan management service and support, broking and administration services for health, wellbeing, and other group benefit program, including medical, dental, disability, life, voluntary benefits and other coverages; actuarial support, plan design, and administrative services for pension and retirement savings plans; retirement consulting services and solutions; and integrated solutions that consists of investment discretionary management, pension administration, core actuarial, and communication and change management assistance services. It also provides advice, data, software, and products to address clients' total rewards and talent issues; and risk advice, insurance brokerage, and consulting services in the areas of property and casualty, affinity, risk and analytics, aerospace, construction, global markets direct & facultative, financial, executive and professional risks, financial solutions, crisis management, surety, marine, and natural resources. In addition, the company offers integrated solutions that consists of investment discretionary management, pension administration, core actuarial, and communication and change management assistance services; and software and technology, risk and capital management, products and product pricing, financial and regulatory reporting, financial and capital modeling, M&A, outsourcing, and business management services. The company was formerly known as Willis Group Holdings Public Limited Company and changed its name to Willis Towers Watson Public Limited Company in January 2016. Willis Towers Watson Public Limited Company was founded in 1828 and is based in London, the United Kingdom.