Financial Analysis: RLI (RLI) versus Chubb (CB)
RLI (NYSE:RLI) and Chubb (NYSE:CB) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.
Institutional and Insider Ownership
88.7% of RLI shares are owned by institutional investors. Comparatively, 87.6% of Chubb shares are owned by institutional investors. 5.5% of RLI shares are owned by insiders. Comparatively, 0.4% of Chubb shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This is a summary of current recommendations for RLI and Chubb, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
RLI presently has a consensus price target of $59.00, suggesting a potential downside of 15.64%. Chubb has a consensus price target of $152.70, suggesting a potential upside of 11.99%. Given Chubb’s stronger consensus rating and higher possible upside, analysts clearly believe Chubb is more favorable than RLI.
RLI pays an annual dividend of $0.88 per share and has a dividend yield of 1.3%. Chubb pays an annual dividend of $2.92 per share and has a dividend yield of 2.1%. RLI pays out 42.9% of its earnings in the form of a dividend. Chubb pays out 30.9% 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. RLI has raised its dividend for 42 consecutive years and Chubb has raised its dividend for 53 consecutive years. Chubb is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares RLI and Chubb’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation and Earnings
This table compares RLI and Chubb’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|RLI||$818.12 million||3.81||$64.17 million||$2.05||34.12|
|Chubb||$33.80 billion||1.85||$3.96 billion||$9.44||14.44|
Chubb has higher revenue and earnings than RLI. Chubb is trading at a lower price-to-earnings ratio than RLI, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
RLI has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Chubb has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500.
Chubb beats RLI on 10 of the 17 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.
Chubb Company Profile
Chubb Limited, through its subsidiaries, provides insurance and reinsurance products worldwide. Its North America Commercial P&C Insurance segment offers commercial property, marine, general casualty, workers' compensation, package policies, and risk management; and professional lines, marine, construction, environmental, medical, cyber risk, and excess casualty, as well as group accident and health insurance to large, middle market, and small commercial businesses in the United States, Canada, and Bermuda. Its North America Personal P&C Insurance segment provides affluent and high net worth individuals and families with homeowners, automobile and collector cars, valuable articles, personal and excess liability, travel insurance, and recreational marine insurance and services in the United States and Canada. Its North America Agricultural Insurance segment offers multiple peril crop and crop-hail insurance; and coverage for farm and ranch property, as well as commercial agriculture products. Its Overseas General Insurance segment provides coverage for traditional commercial property and casualty; and specialty categories, such as financial lines, marine, energy, aviation, political risk, and construction risk, as well as group accident and health, and traditional and specialty personal lines for large corporations, middle markets, and small customers through retail brokers, agents, and other channels. Its Global Reinsurance segment offers traditional and specialty reinsurance under the Chubb Tempest Re brand name to property and casualty companies. Its Life Insurance segment provides protection and savings products comprising whole life, endowment plans, individual term life, group term life, medical and health, personal accident, credit life, universal life, and unit linked contracts. The company was formerly known as ACE Limited and changed its name to Chubb Limited in January 2016. Chubb Limited was founded in 1985 and is headquartered in Zurich, Switzerland.
Receive News & Ratings for RLI Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for RLI and related companies with MarketBeat.com's FREE daily email newsletter.