Critical Contrast: State National Companies (SNC) and Endurance Specialty (ENH)

State National Companies (NASDAQ: SNC) and Endurance Specialty (NYSE:ENH) are both financials companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, risk, valuation, earnings, analyst recommendations, institutional ownership and profitability.

Dividends

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State National Companies pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Endurance Specialty pays an annual dividend of $1.52 per share and has a dividend yield of 1.6%. State National Companies pays out 19.2% of its earnings in the form of a dividend. Endurance Specialty pays out 30.8% 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. State National Companies has increased its dividend for 7 consecutive years.

Earnings & Valuation

This table compares State National Companies and Endurance Specialty’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
State National Companies $217.07 million 4.08 $49.07 million $1.25 16.82
Endurance Specialty N/A N/A N/A $4.93 18.86

State National Companies has higher revenue and earnings than Endurance Specialty. State National Companies is trading at a lower price-to-earnings ratio than Endurance Specialty, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

58.6% of State National Companies shares are held by institutional investors. Comparatively, 82.7% of Endurance Specialty shares are held by institutional investors. 34.8% of State National Companies shares are held by company insiders. Comparatively, 5.8% of Endurance Specialty shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for State National Companies and Endurance Specialty, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
State National Companies 1 2 4 0 2.43
Endurance Specialty 0 0 0 0 N/A

State National Companies presently has a consensus target price of $59.50, indicating a potential upside of 183.06%. Given State National Companies’ higher probable upside, equities analysts plainly believe State National Companies is more favorable than Endurance Specialty.

Profitability

This table compares State National Companies and Endurance Specialty’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
State National Companies 23.91% 18.02% 1.72%
Endurance Specialty 4.41% 1.29% 0.72%

Summary

State National Companies beats Endurance Specialty on 9 of the 13 factors compared between the two stocks.

About State National Companies

State National Companies, Inc. is a specialty provider of property and casualty insurance. The Company’s segments include Program Services, Lender Services and Corporate. In the Program Services segment, the Company operates an issuing carrier (fronting) business to provide insurance capacity access to the United States property and casualty insurance markets. In the Lender Services segment, the Company specializes in providing collateral protection insurance, which insures automobiles held as collateral for loans made by financial institutions. The Company writes its insurance business through its insurance company subsidiaries, which include State National Insurance Company, Inc. (SNIC), National Specialty Insurance Company (NSIC) and United Specialty Insurance Company (USIC). As of December 31, 2016, SNIC and NSIC were admitted carriers licensed to write property and casualty business in all 50 states and the District of Columbia. USIC is an admitted carrier in Delaware.

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.

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