Critical Survey: White Mountains Insurance Group (WTM) and Employers Holdings (EIG)
White Mountains Insurance Group (NYSE: WTM) and Employers Holdings (NYSE:EIG) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, valuation, dividends, institutional ownership, profitability and risk.
This table compares White Mountains Insurance Group and Employers Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|White Mountains Insurance Group||9.80%||1.01%||0.57%|
This is a summary of recent ratings and price targets for White Mountains Insurance Group and Employers Holdings, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|White Mountains Insurance Group||0||0||0||0||N/A|
Employers Holdings has a consensus price target of $36.00, suggesting a potential downside of 14.39%. Given Employers Holdings’ higher possible upside, analysts clearly believe Employers Holdings is more favorable than White Mountains Insurance Group.
Volatility & Risk
White Mountains Insurance Group has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500. Comparatively, Employers Holdings has a beta of 1.1, indicating that its stock price is 10% more volatile than the S&P 500.
Insider & Institutional Ownership
88.0% of White Mountains Insurance Group shares are held by institutional investors. Comparatively, 77.3% of Employers Holdings shares are held by institutional investors. 5.1% of White Mountains Insurance Group shares are held by insiders. Comparatively, 4.0% of Employers Holdings shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Valuation & Earnings
This table compares White Mountains Insurance Group and Employers Holdings’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|White Mountains Insurance Group||$1.43 billion||2.53||$98.90 million||$22.39||37.70|
|Employers Holdings||$773.40 million||1.76||$148.80 million||$3.22||13.06|
Employers Holdings has higher revenue, but lower earnings than White Mountains Insurance Group. Employers Holdings is trading at a lower price-to-earnings ratio than White Mountains Insurance Group, indicating that it is currently the more affordable of the two stocks.
White Mountains Insurance Group pays an annual dividend of $1.00 per share and has a dividend yield of 0.1%. Employers Holdings pays an annual dividend of $0.60 per share and has a dividend yield of 1.4%. White Mountains Insurance Group pays out 4.5% of its earnings in the form of a dividend. Employers Holdings pays out 18.6% 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.
White Mountains Insurance Group Company Profile
White Mountains Insurance Group, Ltd. is a holding company. The Company’s principal businesses are conducted through its insurance subsidiaries and other affiliates. Its segments include OneBeacon, HG Global/BAM and Other Operations. The OneBeacon segment consists of the operations of OneBeacon Insurance Group, Ltd. (OneBeacon Ltd.), which owns a family of property and casualty insurance companies, and Split Rock Insurance, Ltd. (Split Rock), a reinsurance company (collectively, OneBeacon). The HG Global/BAM segment consists of the operations of HG Global Ltd. (HG Global) and Build America Mutual Assurance Company (BAM). The Other Operations segment consists of the Company and its intermediate holding companies, its investment management subsidiary, White Mountains Advisors LLC, and certain consolidated and unconsolidated private capital investments. OneBeacon is a specialty property and casualty insurance provider that offers a range of insurance products in the United States.
Employers Holdings Company Profile
Employers Holdings, Inc. is a holding company. Through its insurance subsidiaries, the Company provides workers’ compensation insurance coverage to select, small businesses in low to medium hazard industries. It provides workers’ compensation insurance under a statutory system wherein employers are required to provide coverage for their employees’ medical, disability, vocational rehabilitation, and/or death benefit costs for work-related injuries or illnesses. As of December 31, 2016 the Company provided workers’ compensation insurance in 36 states and the District of Columbia, with a concentration in California. Its insurance subsidiaries include Employers Insurance Company of Nevada (EICN), Employers Compensation Insurance Company (ECIC), Employers Preferred Insurance Company (EPIC) and Employers Assurance Company (EAC). The Company’s insurance products are jointly offered and marketed with and through its partners and alliances.
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