Critical Contrast: RLI (NYSE:RLI) versus Sampo (OTCMKTS:SAXPY)

Sampo (OTCMKTS:SAXPY) and RLI (NYSE:RLI) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, analyst recommendations, valuation, profitability, earnings and dividends.

Dividends

Sampo pays an annual dividend of $0.31 per share and has a dividend yield of 1.5%. RLI pays an annual dividend of $0.64 per share and has a dividend yield of 1.1%. Sampo pays out 18.0% of its earnings in the form of a dividend. RLI pays out 14.7% 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.

Analyst Ratings

This is a breakdown of current ratings for Sampo and RLI, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sampo	0	3	0	1	2.50
RLI	1	6	0	1	2.13

RLI has a consensus price target of $65.20, indicating a potential upside of 13.01%. Given RLI’s higher probable upside, analysts clearly believe RLI is more favorable than Sampo.

Institutional and Insider Ownership

0.0% of Sampo shares are owned by institutional investors. Comparatively, 77.9% of RLI shares are owned by institutional investors. 2.2% of RLI shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

Sampo has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500. Comparatively, RLI has a beta of 0.5, meaning that its stock price is 50% less volatile than the S&P 500.

Valuation and Earnings

This table compares Sampo and RLI”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sampo	$13.08 billion	8.60	$2.26 billion	$1.72	12.30
RLI	$1.88 billion	2.82	$403.34 million	$4.36	13.23

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sampo	N/A	18.91%	5.58%
RLI	21.43%	18.67%	5.41%

Summary

RLI beats Sampo on 9 of the 16 factors compared between the two stocks.

About Sampo

Sampo Oyj, together with its subsidiaries, engages in the provision of non-life insurance products and services in Finland, Sweden, Norway, Denmark, Estonia, Lithuania, Latvia, and the United Kingdom. The company operates through If, Topdanmark, Hastings, Mandatum, and Holding segments. It offers property, casualty, liability, accident, sickness, household, homeowner, motor, travel, marine, aviation, transport, forest, livestock, health, workers compensation, car, van, and bike insurance services, as well as reinsurance services. The company was founded in 1909 and is based in Helsinki, Finland.

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.