Federated National (FNHC) vs. Selective Insurance Group (SIGI) Financial Survey
Federated National (NASDAQ: FNHC) and Selective Insurance Group (NASDAQ:SIGI) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.
Institutional & Insider Ownership
62.3% of Federated National shares are owned by institutional investors. Comparatively, 77.9% of Selective Insurance Group shares are owned by institutional investors. 10.8% of Federated National shares are owned by company insiders. Comparatively, 3.0% of Selective Insurance Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Federated National pays an annual dividend of $0.32 per share and has a dividend yield of 2.4%. Selective Insurance Group pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. Federated National pays out -45.1% of its earnings in the form of a dividend. Selective Insurance Group pays out 23.9% 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. Federated National is clearly the better dividend stock, given its higher yield and lower payout ratio.
Risk and Volatility
Federated National has a beta of 1.62, meaning that its stock price is 62% more volatile than the S&P 500. Comparatively, Selective Insurance Group has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500.
This is a breakdown of recent recommendations for Federated National and Selective Insurance Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Selective Insurance Group||0||4||0||0||2.00|
Federated National presently has a consensus price target of $21.00, indicating a potential upside of 56.48%. Selective Insurance Group has a consensus price target of $49.91, indicating a potential downside of 18.18%. Given Federated National’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Federated National is more favorable than Selective Insurance Group.
This table compares Federated National and Selective Insurance Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Selective Insurance Group||7.36%||11.00%||2.37%|
Earnings & Valuation
This table compares Federated National and Selective Insurance Group’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Federated National||$316.38 million||0.55||-$190,000.00||($0.71)||-18.90|
|Selective Insurance Group||$2.28 billion||1.56||$158.49 million||$3.01||20.27|
Selective Insurance Group has higher revenue and earnings than Federated National. Federated National is trading at a lower price-to-earnings ratio than Selective Insurance Group, indicating that it is currently the more affordable of the two stocks.
Selective Insurance Group beats Federated National on 8 of the 15 factors compared between the two stocks.
About Federated National
Federated National Holding Company (FNHC) is an insurance holding company that controls all steps in the insurance underwriting, distribution and claims processes through its subsidiaries and its contractual relationships with its independent agents and general agents. The Company is authorized to underwrite homeowners’ multi-peril (homeowners), commercial general liability, federal flood, personal auto and various other lines of insurance in Florida and various other states. The Company markets, distributes and services its own and third-party insurers’ products and its other services through a network of independent agents. The Company’s insurance lines of business include Homeowners’ Property and Casualty Insurance, Commercial General Liability, Personal Automobile and Flood. FNIC and MNIC underwrite homeowners’ insurance in Florida, and FNIC underwrites insurance in Alabama, Louisiana and South Carolina. Alabama and Louisiana.
About Selective Insurance Group
Selective Insurance Group, Inc. is a holding company. As of December 31, 2016, the Company had 10 insurance subsidiaries, nine of which were licensed by various state departments of insurance to write specific lines of property and casualty insurance business. The remaining subsidiary is authorized by various state insurance departments to write property and casualty insurance in the excess and surplus lines (E&S) market. Its segments include Standard Commercial Lines, which consists of insurance products and services provided in the standard marketplace; Standard Personal Lines, which consists of insurance products and services, including flood insurance coverage that it writes through the National Flood Insurance Program (NFIP); E&S Lines, which consists of insurance products and services provided to customers not obtaining coverage in the standard marketplace, and investment segment invests insurance premiums, as well as amounts generated through its capital management strategies.
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