Analyzing Torchmark (TMK) & National Security Group (NSEC)

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Torchmark (NYSE:TMK) and National Security Group (NASDAQ:NSEC) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, dividends and analyst recommendations.

Dividends

Torchmark pays an annual dividend of $0.69 per share and has a dividend yield of 0.8%. National Security Group pays an annual dividend of $0.20 per share and has a dividend yield of 1.5%. Torchmark pays out 11.3% of its earnings in the form of a dividend. Torchmark has raised its dividend for 9 consecutive years.

Institutional & Insider Ownership

76.1% of Torchmark shares are held by institutional investors. Comparatively, 2.5% of National Security Group shares are held by institutional investors. 3.6% of Torchmark shares are held by company insiders. Comparatively, 38.2% of National Security Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Torchmark and National Security Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Torchmark 16.37% 12.75% 3.07%
National Security Group 4.11% 5.82% 1.87%

Analyst Ratings

This is a breakdown of recent recommendations for Torchmark and National Security Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Torchmark 2 1 1 0 1.75
National Security Group 0 0 0 0 N/A

Torchmark currently has a consensus target price of $81.67, indicating a potential downside of 6.33%. Given Torchmark’s higher probable upside, analysts plainly believe Torchmark is more favorable than National Security Group.

Risk and Volatility

Torchmark has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, National Security Group has a beta of 0.01, suggesting that its share price is 99% less volatile than the S&P 500.

Earnings and Valuation

This table compares Torchmark and National Security Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Torchmark $4.30 billion 2.23 $701.47 million $6.13 14.22
National Security Group $64.86 million 0.51 $780,000.00 N/A N/A

Torchmark has higher revenue and earnings than National Security Group.

Summary

Torchmark beats National Security Group on 12 of the 15 factors compared between the two stocks.

About Torchmark

Torchmark Corporation, through its subsidiaries, provides various life and health insurance products, and annuities in the United States, Canada, and New Zealand. It operates through four segments: Life Insurance, Health Insurance, Annuity, and Investment. The company offers traditional and interest-sensitive whole life insurance, as well as term life insurance. It also provides health insurance product, including Medicare Supplement, critical illness, accident, and limited-benefit supplemental hospital and surgical coverage; and annuities, such as single-premium and flexible-premium deferred annuities. The company sells its products through sales by direct response, exclusive agents, and independent agents, as well as through direct mail, electronic media, and insert media. Torchmark Corporation was founded in 1900 and is headquartered in McKinney, Texas.

About National Security Group

The National Security Group, Inc., an insurance holding company, provides insurance products and services in the United States. The company operates in two segments, Property and Casualty Insurance, and Life Insurance. The Property and Casualty Insurance segment primarily underwrites home insurance coverage with primary lines of business consisting of dwelling fire and extended coverage, mobile homeowners, and other liability insurance services in Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, Oklahoma, South Carolina, Tennessee, and West Virginia, as well as operates on a surplus lines basis in the state of Louisiana. The Life Insurance segment offers ordinary life, accident and health, supplemental hospital, and cancer insurance products in Alabama, Florida, Georgia, Mississippi, South Carolina, Tennessee, and Texas. The company distributes its products through independent agents, home service agents, and brokers. The National Security Group, Inc. was founded in 1947 and is based in Elba, Alabama.

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