Greenlight Capital Re (NYSE: AFG) and American Financial Group (NYSE:AFG) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, earnings, risk, profitability and dividends.

Earnings and Valuation

This table compares Greenlight Capital Re and American Financial Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Greenlight Capital Re $645.67 million 0.69 -$44.95 million ($1.21) -9.88
American Financial Group $6.87 billion 1.43 $475.00 million $6.55 16.79

American Financial Group has higher revenue and earnings than Greenlight Capital Re. Greenlight Capital Re is trading at a lower price-to-earnings ratio than American Financial Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Greenlight Capital Re and American Financial Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Greenlight Capital Re 0 0 1 0 3.00
American Financial Group 0 1 2 0 2.67

Greenlight Capital Re currently has a consensus price target of $25.00, indicating a potential upside of 109.21%. American Financial Group has a consensus price target of $120.50, indicating a potential upside of 9.55%. Given Greenlight Capital Re’s stronger consensus rating and higher possible upside, analysts plainly believe Greenlight Capital Re is more favorable than American Financial Group.

Risk and Volatility

Greenlight Capital Re has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, American Financial Group has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.

Dividends

American Financial Group pays an annual dividend of $1.40 per share and has a dividend yield of 1.3%. Greenlight Capital Re does not pay a dividend. American Financial Group pays out 21.4% of its earnings in the form of a dividend. American Financial Group has increased its dividend for 12 consecutive years.

Profitability

This table compares Greenlight Capital Re and American Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Greenlight Capital Re -44.10% -25.61% -6.50%
American Financial Group 7.50% 13.27% 1.14%

Institutional and Insider Ownership

43.3% of Greenlight Capital Re shares are held by institutional investors. Comparatively, 62.0% of American Financial Group shares are held by institutional investors. 21.4% of Greenlight Capital Re shares are held by company insiders. Comparatively, 13.7% of American Financial Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

American Financial Group beats Greenlight Capital Re on 12 of the 17 factors compared between the two stocks.

About Greenlight Capital Re

Greenlight Capital Re, Ltd., through its subsidiaries, engages in the provision of property and casualty reinsurance products and services worldwide. Its frequency business comprises contracts containing small losses emanating from multiple events and enables the clients to increase their underwriting capacity; and severity business includes contracts with the potential for significant losses emanating from one event or various events. The company offers various property reinsurance products and services that include commercial, motor, and personal; casualty reinsurance products and services, which include general liability, motor, professional, and worker's compensation; and specialty reinsurance products and services that include accident and health, financial, marine, and other products. It markets its products through reinsurance brokers. The company was founded in 2004 and is headquartered in Grand Cayman, the Cayman Islands.

About American Financial Group

American Financial Group, Inc., through its subsidiaries, provides property and casualty insurance products in the United States. The company operates through Property and Casualty Insurance, Annuity, Run-Off Long-Term Care and Life, and Other segments. It offers property and transportation insurance products, such as physical damage and liability coverage for buses, trucks and recreational vehicles, inland and ocean marine, agricultural-related products, and other property coverages; specialty casualty insurance, including primarily excess and surplus, general liability, executive liability, professional liability, umbrella and excess liability, and specialty coverage in targeted markets and customized programs for small to mid-sized businesses; and specialty financial insurance products comprising risk management insurance programs for leasing and financing institutions, surety and fidelity products, and trade credit insurance. The company sells its property and casualty insurance products through independent insurance agents and brokers, as well as through employee agents. It also provides traditional fixed and fixed-indexed annuities to the retail, financial institutions, and education markets; and engages in the commercial real estate operations in Cincinnati, Whitefield, New Hampshire, Chesapeake Bay, Charleston, and Palm Beach. American Financial Group, Inc. was founded in 1872 and is headquartered in Cincinnati, Ohio.

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