Universal Insurance (NYSE:UVE) and Primerica (NYSE:PRI) Financial Contrast

Universal Insurance (NYSE:UVE) and Primerica (NYSE:PRI) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, dividends, profitability, earnings, analyst recommendations, risk and institutional ownership.

Profitability

This table compares Universal Insurance and Primerica’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Universal Insurance	13.49%	37.67%	7.12%
Primerica	23.20%	32.45%	5.35%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Universal Insurance and Primerica, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal Insurance	0	2	0	1	2.67
Primerica	0	6	2	0	2.25

Universal Insurance currently has a consensus price target of $45.00, suggesting a potential upside of 4.50%. Primerica has a consensus price target of $315.17, suggesting a potential upside of 14.08%. Given Primerica’s higher probable upside, analysts clearly believe Primerica is more favorable than Universal Insurance.

Insider & Institutional Ownership

66.6% of Universal Insurance shares are held by institutional investors. Comparatively, 90.9% of Primerica shares are held by institutional investors. 15.0% of Universal Insurance shares are held by company insiders. Comparatively, 0.6% of Primerica shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Universal Insurance pays an annual dividend of $0.64 per share and has a dividend yield of 1.5%. Primerica pays an annual dividend of $4.80 per share and has a dividend yield of 1.7%. Universal Insurance pays out 8.4% of its earnings in the form of a dividend. Primerica pays out 19.3% 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. Primerica is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation and Earnings

This table compares Universal Insurance and Primerica”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal Insurance	$1.60 billion	0.75	$182.95 million	$7.58	5.68
Primerica	$3.29 billion	2.58	$751.23 million	$24.90	11.09

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

Volatility & Risk

Universal Insurance has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Primerica has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Summary

Primerica beats Universal Insurance on 12 of the 18 factors compared between the two stocks.

About Universal Insurance

Universal Insurance Holdings, Inc., together with its subsidiaries, operates as an integrated insurance holding company in the United States. It develops, markets, and underwrites insurance products for personal residential insurance, such as homeowners, renters/tenants, condo unit owners, and dwelling/fire; and offers allied lines, coverage for other structures, and personal property, liability, and personal articles coverages. The company also advises on actuarial issues, oversees distribution, administers claims payments, performs policy administration and underwriting, and assists with reinsurance negotiations; places and manages reinsurance programs for the insurance entities; and operates Clovered.com, a digital agency for various carrier partners and utilization of digital applications for adjusting claims. It offers its products through a network of independent agents, as well as direct-to-consumer online solutions, including digital insurance agency. The company was formerly known as Universal Heights, Inc. and changed its name to Universal Insurance Holdings, Inc. in January 2001. Universal Insurance Holdings, Inc. was incorporated in 1990 and is headquartered in Fort Lauderdale, Florida.

About Primerica

Primerica, Inc., together with its subsidiaries, provides financial products and services to middle-income households in the United States and Canada. The company operates in four segments: Term Life Insurance; Investment and Savings Products; Senior Health; and Corporate and Other Distributed Products. The Term Life Insurance segment underwrites individual term life insurance products. The Investment and Savings Products segment provides mutual funds and various retirement plans, managed investments, variable and fixed annuities, and fixed indexed annuities. The Senior Health segment offers segregated funds; and medicare advantage and supplement plans. The Corporate and Other Distributed Products segment provides mortgage loans; prepaid legal services that assist subscribers with legal matters, such as drafting wills, living wills and powers of attorney, trial defense, and motor vehicle-related matters; ID theft defense services; auto and homeowners' insurance; home automation solutions; and insurance products, including supplemental and accidental death, and disability insurance. It distributes and sells its products through licensed sales representatives. Primerica, Inc. was founded in 1927 and is headquartered in Duluth, Georgia.