Kinsale Capital Group (NASDAQ: KNSL) and Universal Insurance (NYSE:UVE) are both small-cap finance companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, earnings, valuation, profitability and analyst recommendations.
This table compares Kinsale Capital Group and Universal Insurance’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Kinsale Capital Group||13.33%||11.76%||4.21%|
83.1% of Kinsale Capital Group shares are owned by institutional investors. Comparatively, 74.3% of Universal Insurance shares are owned by institutional investors. 11.2% of Kinsale Capital Group shares are owned by company insiders. Comparatively, 10.5% of Universal Insurance shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Kinsale Capital Group and Universal Insurance’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kinsale Capital Group||$186.78 million||6.04||$24.90 million||$1.16||46.20|
|Universal Insurance||$751.92 million||1.52||$106.93 million||$2.99||10.99|
Universal Insurance has higher revenue and earnings than Kinsale Capital Group. Universal Insurance is trading at a lower price-to-earnings ratio than Kinsale Capital Group, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent recommendations and price targets for Kinsale Capital Group and Universal Insurance, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Kinsale Capital Group||0||1||2||0||2.67|
Kinsale Capital Group currently has a consensus target price of $45.50, indicating a potential downside of 15.10%. Universal Insurance has a consensus target price of $32.00, indicating a potential downside of 2.59%. Given Universal Insurance’s stronger consensus rating and higher probable upside, analysts plainly believe Universal Insurance is more favorable than Kinsale Capital Group.
Kinsale Capital Group pays an annual dividend of $0.28 per share and has a dividend yield of 0.5%. Universal Insurance pays an annual dividend of $0.56 per share and has a dividend yield of 1.7%. Kinsale Capital Group pays out 24.1% of its earnings in the form of a dividend. Universal Insurance pays out 18.7% 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. Universal Insurance is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Kinsale Capital Group has a beta of 0.11, indicating that its stock price is 89% less volatile than the S&P 500. Comparatively, Universal Insurance has a beta of 1.85, indicating that its stock price is 85% more volatile than the S&P 500.
Universal Insurance beats Kinsale Capital Group on 11 of the 16 factors compared between the two stocks.
Kinsale Capital Group Company Profile
Kinsale Capital Group, Inc. is a specialty insurance company. The Company focuses on the excess and surplus lines (E&S) market in the United States. The Company operates through the Excess and Surplus Lines Insurance segment. The Company markets and sells these insurance products in approximately 50 states and the District of Columbia through a network of independent insurance brokers. The Company’s commercial lines offerings include construction, small business, excess casualty, general casualty, energy, professional liability, life sciences, product liability, allied health, healthcare, commercial property, management liability, environmental, inland marine, commercial insurance and public entity. The Company writes an array of coverages with a focus on smaller commercial buyers. The Company also writes a small amount of homeowners insurance in the personal lines market. The Company’s subsidiaries include Kinsale Management, Inc. and Kinsale Insurance Company.
Universal Insurance Company Profile
Universal Insurance Holdings, Inc. (UVE) is a private personal residential homeowners insurance company in Florida. The Company performs substantially all aspects of insurance underwriting, policy issuance, general administration, and claims processing and settlement internally. The Company’s subsidiaries include Universal Property & Casualty Insurance Company (UPCIC) and American Platinum Property and Casualty Insurance Company (APPCIC). UPCIC writes homeowners insurance policies in states, including Alabama, Delaware, Florida, Georgia, Hawaii, Indiana, Maryland, Massachusetts, Michigan, Minnesota, North Carolina, Pennsylvania, South Carolina and Virginia. APPCIC writes homeowners and commercial residential insurance policies in Florida. The Company has developed a suite of applications that provide underwriting, policy and claim administration services, including billing, policy maintenance, inspections, refunds, commissions and data analysis.
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