Head to Head Analysis: Primerica (NYSE:PRI) vs. Stewart Information Services (NYSE:STC)

Primerica (NYSE:PRI) and Stewart Information Services (NYSE:STC) are both finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, analyst recommendations, dividends and profitability.

Volatility & Risk

Primerica has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, Stewart Information Services has a beta of 1.02, indicating that its share price is 2% more volatile than the S&P 500.

Profitability

This table compares Primerica and Stewart Information Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Primerica	22.86%	30.90%	5.41%
Stewart Information Services	3.58%	9.39%	4.77%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Primerica and Stewart Information Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Primerica	0	5	2	0	2.29
Stewart Information Services	1	2	4	0	2.43

Primerica currently has a consensus target price of $318.80, indicating a potential upside of 8.83%. Stewart Information Services has a consensus target price of $75.75, indicating a potential upside of 77.40%. Given Stewart Information Services’ stronger consensus rating and higher possible upside, analysts clearly believe Stewart Information Services is more favorable than Primerica.

Dividends

Primerica pays an annual dividend of $4.80 per share and has a dividend yield of 1.6%. Stewart Information Services pays an annual dividend of $2.20 per share and has a dividend yield of 5.2%. Primerica pays out 19.0% of its earnings in the form of a dividend. Stewart Information Services pays out 55.1% 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 2 consecutive years and Stewart Information Services has raised its dividend for 4 consecutive years. Stewart Information Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings and Valuation

This table compares Primerica and Stewart Information Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Primerica	$3.49 billion	2.55	$751.23 million	$25.31	11.57
Stewart Information Services	$2.92 billion	0.45	$115.54 million	$3.99	10.70

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

Institutional and Insider Ownership

90.9% of Primerica shares are held by institutional investors. Comparatively, 96.9% of Stewart Information Services shares are held by institutional investors. 0.6% of Primerica shares are held by company insiders. Comparatively, 2.9% of Stewart Information Services shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Primerica beats Stewart Information Services on 9 of the 17 factors compared between the two stocks.

About Primerica

Primerica, Inc. provides financial products and services to middle-income households in the United States and Canada. Its core business is term life insurance, which it distributes through a network of representatives who work directly with clients. Through its investment and savings businesses, Primerica offers products and services including mutual funds, annuities, managed investment accounts, and retirement planning solutions. It also connects clients with certain third-party providers of products such as auto and homeowners insurance.

About Stewart Information Services

Stewart Information Services Corporation is a Houston-based provider of title insurance and real estate transaction services. Its business includes issuing title insurance policies and supporting property transfers through services such as title searches, escrow, closing and settlement. The company serves homebuyers, sellers, real estate professionals, mortgage lenders and other participants in property transactions. It also provides related services, including property information and services supporting mortgage lending and real estate operations.