Endurance Specialty (NYSE: ENH) and Hanover Insurance Group (NYSE:THG) are both mid-cap financials companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, profitability, valuation, analyst recommendations, institutional ownership, earnings and risk.
Institutional & Insider Ownership
82.7% of Endurance Specialty shares are held by institutional investors. Comparatively, 82.9% of Hanover Insurance Group shares are held by institutional investors. 5.8% of Endurance Specialty shares are held by insiders. Comparatively, 1.1% of Hanover Insurance Group shares are held by 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.
Endurance Specialty pays an annual dividend of $1.52 per share and has a dividend yield of 1.6%. Hanover Insurance Group pays an annual dividend of $2.16 per share and has a dividend yield of 2.0%. Endurance Specialty pays out 30.8% of its earnings in the form of a dividend. Hanover Insurance Group pays out 41.1% 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. Endurance Specialty has increased its dividend for 6 consecutive years and Hanover Insurance Group has increased its dividend for 7 consecutive years. Hanover Insurance Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Endurance Specialty and Hanover Insurance Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hanover Insurance Group||3.59%||6.88%||1.36%|
Earnings and Valuation
This table compares Endurance Specialty and Hanover Insurance Group’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Hanover Insurance Group||$5.18 billion||0.91||$186.20 million||$5.25||21.06|
Hanover Insurance Group has higher revenue and earnings than Endurance Specialty. Endurance Specialty is trading at a lower price-to-earnings ratio than Hanover Insurance Group, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations for Endurance Specialty and Hanover Insurance Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hanover Insurance Group||0||1||0||0||2.00|
Hanover Insurance Group has a consensus price target of $91.00, suggesting a potential downside of 17.70%. Given Hanover Insurance Group’s higher probable upside, analysts plainly believe Hanover Insurance Group is more favorable than Endurance Specialty.
Hanover Insurance Group beats Endurance Specialty on 9 of the 12 factors compared between the two stocks.
About Endurance Specialty
Endurance Specialty Holdings Ltd. is a holding company. The Company, through its operating subsidiaries in Bermuda, the United States and the United Kingdom, focuses on underwriting specialty lines of personal and commercial property, and casualty insurance and reinsurance. It operates through two segments: Insurance and Reinsurance. In the Insurance segment, it writes agriculture, casualty and other specialty, professional lines, and property, marine/energy and aviation insurance. In the Reinsurance segment, it writes catastrophe, property, casualty, professional lines and specialty reinsurance. Its Insurance and Reinsurance segments both include property-related coverages, which provide insurance or reinsurance of an insurable interest in tangible property for property loss, damage or loss of use. In addition, its Insurance and Reinsurance segments include various casualty insurance and reinsurance coverages, which are concerned with the losses caused by injuries to third parties.
About Hanover Insurance Group
The Hanover Insurance Group, Inc. is a holding company. The Company is engaged in providing property and casualty insurance products and services. The Company has four segments: Commercial Lines, Personal Lines, Chaucer and Other. It markets its domestic products and services through independent agents and brokers in the United States, and conducts business internationally through a subsidiary, Chaucer Holdings Limited, which operates through the Society and Corporation of Lloyd’s (Lloyd’s). Its Commercial Lines product suite provides agents and customers with products designed for small, middle and specialized markets. Its Personal Lines coverages include other personal lines, which consist of umbrella and fire, among others. The Chaucer segment consists of international business written through Lloyd’s, including marine and aviation, and property. The Other segment consists of Opus Investment Management, Inc. (Opus), which provides investment advisory services to affiliates.
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