Montpelier Re (NYSE: MRH) and State Auto Financial (NASDAQ:STFC) are both small-cap financials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, profitability, institutional ownership and earnings.
This table compares Montpelier Re and State Auto Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|State Auto Financial||-0.75%||-1.83%||-0.55%|
This is a summary of recent recommendations and price targets for Montpelier Re and State Auto Financial, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|State Auto Financial||0||1||0||0||2.00|
State Auto Financial has a consensus price target of $26.00, indicating a potential downside of 6.58%. Given State Auto Financial’s higher possible upside, analysts clearly believe State Auto Financial is more favorable than Montpelier Re.
Earnings and Valuation
This table compares Montpelier Re and State Auto Financial’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|State Auto Financial||$1.42 billion||0.83||-$10.70 million||($0.26)||-107.03|
Montpelier Re has higher earnings, but lower revenue than State Auto Financial. State Auto Financial is trading at a lower price-to-earnings ratio than Montpelier Re, indicating that it is currently the more affordable of the two stocks.
State Auto Financial pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. Montpelier Re does not pay a dividend. State Auto Financial pays out -153.8% of its earnings in the form of a dividend.
Insider and Institutional Ownership
33.8% of State Auto Financial shares are owned by institutional investors. 1.5% of State Auto Financial shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
State Auto Financial beats Montpelier Re on 6 of the 11 factors compared between the two stocks.
Montpelier Re Company Profile
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.
State Auto Financial Company Profile
State Auto Financial Corporation is a property and casualty insurance holding company. The Company is engaged in writing personal, business and specialty insurance. Its segments include Personal Insurance Segment, Commercial Insurance Segment and Specialty Insurance Segment. Its Personal Insurance Segment include personal auto, homeowners and other personal; Commercial Insurance Segment include commercial auto, small commercial package, middle market commercial, workers’ compensation and other commercial, and Specialty Insurance Segment include Excess & Surplus (E&S) property, E&S casualty and programs. State Auto Financial’s subsidiaries include State Auto Property & Casualty Insurance Company (State Auto P&C), Milbank Insurance Company (Milbank) and State Auto Insurance Company of Ohio (SA Ohio), each of which is a property and casualty insurance company, and Stateco Financial Services, Inc., (Stateco), which provides investment management services to affiliated insurance companies.
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