American National Insurance (NASDAQ: ANAT) and National General Holdings Corp (NASDAQ:NGHC) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, valuation, risk, institutional ownership, earnings, analyst recommendations and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for American National Insurance and National General Holdings Corp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American National Insurance 0 0 0 0 N/A
National General Holdings Corp 0 1 1 0 2.50

National General Holdings Corp has a consensus target price of $25.00, suggesting a potential upside of 45.94%. Given National General Holdings Corp’s higher probable upside, analysts clearly believe National General Holdings Corp is more favorable than American National Insurance.

Institutional and Insider Ownership

65.2% of American National Insurance shares are owned by institutional investors. Comparatively, 46.0% of National General Holdings Corp shares are owned by institutional investors. 23.5% of American National Insurance shares are owned by company insiders. Comparatively, 3.4% of National General Holdings Corp shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

American National Insurance pays an annual dividend of $3.28 per share and has a dividend yield of 2.8%. National General Holdings Corp pays an annual dividend of $0.16 per share and has a dividend yield of 0.9%. American National Insurance pays out 45.4% of its earnings in the form of a dividend. National General Holdings Corp pays out 22.2% 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.

Profitability

This table compares American National Insurance and National General Holdings Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American National Insurance 5.95% 2.61% 0.50%
National General Holdings Corp 2.13% 7.80% 1.61%

Volatility & Risk

American National Insurance has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500. Comparatively, National General Holdings Corp has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Earnings and Valuation

This table compares American National Insurance and National General Holdings Corp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
American National Insurance $3.28 billion 0.95 $260.52 million $7.23 16.02
National General Holdings Corp $4.15 billion 0.44 $249.48 million $0.72 23.79

American National Insurance has higher revenue, but lower earnings than National General Holdings Corp. American National Insurance is trading at a lower price-to-earnings ratio than National General Holdings Corp, indicating that it is currently the more affordable of the two stocks.

Summary

American National Insurance beats National General Holdings Corp on 9 of the 15 factors compared between the two stocks.

About American National Insurance

American National Insurance Company is engaged in life insurance, annuities, and property and casualty insurance. The Company also offers limited health insurance. Its family of companies includes six life insurance companies, eight property and casualty insurance companies, and various non-insurance subsidiaries. Its business segments include Life, which offers products, such as Whole Life, Term Life, Universal Life, Variable Universal Life and Credit Life Insurance; Annuity, including products, such as Deferred Annuity, Single Premium Immediate Annuity and Variable Annuity; Health, including, such as Medicare Supplement, Supplemental Insurance, Stop-Loss, Credit Disability and Medical Expense; Property and Casualty, which offers products, such as Personal Lines, Commercial Lines and Credit-Related Property Insurance products, and Corporate and Other, which consists of its invested assets that are not used to support insurance activities, and non-insurance subsidiaries.

About National General Holdings Corp

National General Holdings Corp. is a specialty personal lines insurance holding company. Through its subsidiaries, the Company provides a range of insurance products, including personal and commercial automobile, homeowners, umbrella, recreational vehicle, supplemental health, lender-placed and other niche products. It operates through two segments: Property and Casualty (P&C) and Accident and Health (A&H). Its P&C segment offers its P&C insurance products through a network of agents, a number of affinity partners and through direct-response marketing programs. Its A&H segment provides accident and non-major medical health insurance products targeting its existing P&C policyholders and the anticipated market of employed persons who are uninsured or underinsured. The P&C segment operates its business through three distribution channels: agency, affinity and direct. The A&H segment provides supplemental accident and health insurance products.

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