Montpelier Re (NYSE: MRH) and United Fire Group (NASDAQ:UFCS) are both small-cap property & casualty insurance – nec companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.
Earnings & Valuation
This table compares Montpelier Re and United Fire Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|United Fire Group||$1.14 billion||0.97||$49.90 million||$0.63||70.64|
This is a breakdown of recent recommendations for Montpelier Re and United Fire Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|United Fire Group||0||2||1||0||2.33|
United Fire Group has a consensus price target of $46.33, suggesting a potential upside of 4.12%. Given United Fire Group’s higher possible upside, analysts plainly believe United Fire Group is more favorable than Montpelier Re.
This table compares Montpelier Re and United Fire Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|United Fire Group||1.49%||1.32%||0.30%|
United Fire Group pays an annual dividend of $1.12 per share and has a dividend yield of 2.5%. Montpelier Re does not pay a dividend. United Fire Group pays out 177.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. United Fire Group has raised its dividend for 7 consecutive years.
Insider and Institutional Ownership
58.4% of United Fire Group shares are owned by institutional investors. 5.8% of United Fire Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
United Fire Group beats Montpelier Re on 8 of the 13 factors compared between the two stocks.
About Montpelier Re
Montpelier RE Holdings Ltd. is a holding company. The Company provides customized insurance and reinsurance solutions to the global market. Through its affiliates in Bermuda, it provides institutional and retail investors with direct access to the global property reinsurance market. It operates in three segments: Montpelier Bermuda, which consists of the assets and operations of Montpelier Reinsurance Ltd., which is its wholly owned operating subsidiary based in Pembroke, Bermuda and is registered as a Bermuda Class four insurer; Montpelier at Lloyd’s, which consists of the assets and operations of Montpelier Syndicate 5151, Montpelier Capital Limited, Montpelier at Lloyd’s Limited, Montpelier Underwriting Services Limited and Montpelier Underwriting Inc., and Collateralized Reinsurance, which is marketed under the name Blue Capital. Blue Capital is an asset management platform offering property catastrophe reinsurance-linked investment products to institutional and retail investors.
About United Fire Group
United Fire Group, Inc., formerly United Fire & Casualty Company, is engaged in the business of writing property and casualty insurance and life insurance and selling annuities. The Company operates in two segments: property and casualty insurance, and life insurance. The Company’s property and casualty insurance segment consists of commercial lines insurance, including surety bonds, personal lines insurance and assumed insurance. Its life insurance segment consists of deferred and immediate annuities, universal life insurance products and traditional life insurance products. Its life insurance segment consists solely of the operations of United Life Insurance Company. On February 1, 2012, the Company completed a holding company reorganization of United Fire Group, Inc., United Fire & Casualty Company and UFC MergeCo, Inc. On March 28, 2011, the Company acquired Mercer Insurance Group, Inc. (Mercer Insurance Group).
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