Head-To-Head Comparison: RLI (NYSE:RLI) and Investors Title (NASDAQ:ITIC)

RLI (NYSE:RLI) and Investors Title (NASDAQ:ITIC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitability, valuation, risk and analyst recommendations.

Insider & Institutional Ownership

77.9% of RLI shares are held by institutional investors. Comparatively, 41.4% of Investors Title shares are held by institutional investors. 2.4% of RLI shares are held by company insiders. Comparatively, 26.0% of Investors Title 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.

Analyst Ratings

This is a summary of recent ratings and price targets for RLI and Investors Title, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
RLI	2	3	1	0	1.83
Investors Title	0	0	1	0	3.00

RLI currently has a consensus target price of $62.40, indicating a potential downside of 3.45%. Given RLI’s higher probable upside, equities research analysts clearly believe RLI is more favorable than Investors Title.

Profitability

This table compares RLI and Investors Title’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
RLI	20.34%	18.19%	5.02%
Investors Title	13.80%	14.62%	11.02%

Earnings and Valuation

This table compares RLI and Investors Title”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
RLI	$1.88 billion	3.15	$403.34 million	$4.29	15.06
Investors Title	$272.76 million	1.89	$35.18 million	$21.35	12.79

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

Volatility & Risk

RLI has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, Investors Title has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500.

Dividends

RLI pays an annual dividend of $0.72 per share and has a dividend yield of 1.1%. Investors Title pays an annual dividend of $1.84 per share and has a dividend yield of 0.7%. RLI pays out 16.8% of its earnings in the form of a dividend. Investors Title pays out 8.6% 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. RLI has increased its dividend for 51 consecutive years. RLI is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

RLI beats Investors Title on 10 of the 16 factors compared between the two stocks.

About RLI

RLI Corp., an insurance holding company, underwrites property and casualty insurance. Its Casualty segment provides commercial and personal coverage products; and general liability products, such as coverage for third-party liability of commercial insureds, including manufacturers, contractors, apartments, and mercantile. It also offers coverages for security guards and environmental liability for underground storage tanks, contractors and asbestos, and environmental remediation specialists; and professional liability coverages for errors and omission coverage for small to medium-sized design, technical, computer, and miscellaneous professionals. This segment provides commercial automobile liability and physical damage insurance to local, intermediate and long haul truckers, public transportation entities, and other types of specialty commercial automobile risks; incidental and related insurance coverages; inland marine coverages; management liability coverages, such as directors and officers liability insurance, fiduciary liability and coverages, employment practice liability, and for various classes of risks, including public and private businesses; and home business insurance products. The company's Property segment offers commercial property, cargo, hull, protection and indemnity, marine liability, inland marine, homeowners' and dwelling fire, and other property insurance products. Its Surety segment offers commercial surety bonds for medium to large-sized businesses; small bonds for businesses and individuals; and bonds for small to medium-sized contractors. The company also engages in various reinsurance coverages. It markets its products through branch offices, wholesale and retail brokers, carrier partners, and underwriting and independent agents. RLI Corp. was incorporated in 1965 and is headquartered in Peoria, Illinois.

About Investors Title

Investors Title Company engages in the issuance of residential and commercial title insurance for residential, institutional, commercial, and industrial properties. The company underwrites land title insurance for owners and mortgagees as a primary insurer; and assumes the reinsurance of title insurance risks from other title insurance companies. It offers services in connection with tax-deferred exchanges of like-kind property; acts as a qualified intermediary in tax-deferred exchanges of property; coordinates the exchange aspects of the real estate transaction, such as drafting standard exchange documents, holding the exchange funds between the sale of the old property and the purchase of the new property, and accepting the formal identification of the replacement property. In addition, it serves as an exchange accommodation titleholder for accomplishing reverse exchanges when the taxpayers decide to acquire replacement property before selling the relinquished property. Further, the company offers investment management and trust services to individuals, companies, banks, and trusts; and consulting and management services to clients to start and operate a title insurance agency. It issues title insurance policies directly and through a network of agents in 22 states and the District of Columbia, primarily in the eastern half of the United States. Investors Title Company was founded in 1972 and is headquartered in Chapel Hill, North Carolina.