RLI (NYSE:RLI) vs. White Mountains Insurance Group (NYSE:WTM) Head-To-Head Review

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RLI (NYSE:RLI) and White Mountains Insurance Group (NYSE:WTM) are both mid-cap finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, valuation, risk, analyst recommendations and earnings.

Insider and Institutional Ownership

89.2% of RLI shares are owned by institutional investors. Comparatively, 87.0% of White Mountains Insurance Group shares are owned by institutional investors. 5.0% of RLI shares are owned by company insiders. Comparatively, 2.5% of White Mountains Insurance Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

RLI pays an annual dividend of $0.92 per share and has a dividend yield of 1.0%. White Mountains Insurance Group pays an annual dividend of $1.00 per share and has a dividend yield of 0.1%. RLI pays out 44.9% of its earnings in the form of a dividend. RLI has raised its dividend for 42 consecutive years. RLI is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares RLI and White Mountains Insurance Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RLI 13.63% 11.34% 3.13%
White Mountains Insurance Group 25.14% -0.69% -0.56%

Analyst Ratings

This is a breakdown of current recommendations and price targets for RLI and White Mountains Insurance Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RLI 1 3 0 0 1.75
White Mountains Insurance Group 0 0 0 0 N/A

RLI presently has a consensus target price of $73.00, indicating a potential downside of 17.33%. Given RLI’s higher possible upside, analysts clearly believe RLI is more favorable than White Mountains Insurance Group.

Volatility and Risk

RLI has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, White Mountains Insurance Group has a beta of 0.4, meaning that its share price is 60% less volatile than the S&P 500.

Valuation and Earnings

This table compares RLI and White Mountains Insurance Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
RLI $818.12 million 4.83 $64.18 million $2.05 43.07
White Mountains Insurance Group $369.10 million 9.18 -$141.20 million N/A N/A

RLI has higher revenue and earnings than White Mountains Insurance Group.

Summary

RLI beats White Mountains Insurance Group on 10 of the 13 factors compared between the two stocks.

RLI Company Profile

RLI Corp., an insurance holding company, underwrites property and casualty insurance in the United States and internationally. Its Casualty segment provides commercial and personal coverage products; and general liability products, such as coverage for third-party liability of commercial insureds, including manufacturers, contractors, apartments, and mercantile. This segment also offers coverages for security guards and in the areas of onshore energy-related businesses and environmental liability for underground storage tanks, contractors and asbestos, and environmental remediation specialists; and professional liability coverages focuses on providing errors and omission coverage to small to medium-sized design, technical, computer, and miscellaneous professionals. In addition, this segment provides commercial automobile liability and physical damage insurance to local, intermediate and long haul truckers, public transportation entities, and equipment dealers; incidental and related insurance coverages; inland marine coverages; management liability coverages, such as directors and officers liability insurance, fiduciary liability and fidelity coverages, and for low to moderate classes of risks, including public and private businesses; and healthcare liability and home business insurance products. The company's Property segment offers commercial property, cargo, hull, protection and indemnity, marine liability, inland marine, homeowners' and dwelling fire, and other property insurance products. Its Surety segment offers small bonds for businesses and individuals; bonds for small to medium-sized contractors; commercial surety bonds for medium-to-large businesses; and commercial surety bonds for the energy, petrochemical, and refining industries. The company also underwrites various reinsurance coverages. The company markets its products through branch offices and independent agents. RLI Corp. was founded in 1965 and is headquartered in Peoria, Illinois.

White Mountains Insurance Group Company Profile

White Mountains Insurance Group, Ltd., through its subsidiaries, provides insurances services in the United States. The company operates through four segments: HG Global/BAM, NSM, MediaAlpha and Other Operations. The HG Global/BAM segment provides insurance on municipal bonds issued to finance public purposes, such as schools, utilities, and transportation facilities, as well as reinsurance protection services. The NSM segment operates as a general underwriting agency and property administrator for specialty property and casualty insurance to sectors, such as specialty transportation, social services, and real estate. The MediaAlpha segment operates MediaAlpha, a marketing technology that enables programmatic buying and selling of vertical specific, performance-based media between advertisers, and publishers through cost-per-click, cost-per-call, and cost-per-lead pricing models. The Other Operations segment provides capital solutions to asset managers and registered investment advisors for general ownership transfers, management buyouts, acquisitions, growth finances, and legacy partner liquidity; facilitates claim payouts; Buzz, an online price comparison and booking platform for all the moving related services in the United Kingdom; and Wobi, a consumer-facing technology platform that enables price comparison. White Mountains Insurance Group, Ltd. is headquartered in Hamilton, Bermuda.

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