Validus (NYSE:VR) and Allstate (NYSE:ALL) are both finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Insider and Institutional Ownership

82.0% of Validus shares are owned by institutional investors. Comparatively, 77.4% of Allstate shares are owned by institutional investors. 2.3% of Validus shares are owned by insiders. Comparatively, 1.6% of Allstate shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations for Validus and Allstate, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Validus 0 0 0 0 N/A
Allstate 0 8 5 0 2.38

Allstate has a consensus price target of $102.64, indicating a potential upside of 6.06%. Given Allstate’s higher possible upside, analysts clearly believe Allstate is more favorable than Validus.

Profitability

This table compares Validus and Allstate’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Validus N/A N/A N/A
Allstate 6.26% 12.66% 2.31%

Dividends

Validus pays an annual dividend of $1.52 per share and has a dividend yield of 2.2%. Allstate pays an annual dividend of $2.00 per share and has a dividend yield of 2.1%. Allstate pays out 24.8% of its earnings in the form of a dividend. Validus has raised its dividend for 4 consecutive years and Allstate has raised its dividend for 8 consecutive years.

Valuation & Earnings

This table compares Validus and Allstate’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Validus N/A N/A N/A N/A N/A
Allstate $39.82 billion 0.81 $2.25 billion $8.07 11.99

Allstate has higher revenue and earnings than Validus.

Summary

Allstate beats Validus on 7 of the 11 factors compared between the two stocks.

Validus Company Profile

Validus Holdings, Ltd. provides reinsurance coverage, insurance coverage, and insurance linked securities management services worldwide. It operates through three segments: Reinsurance, Insurance, and Asset Management. The Reinsurance segment underwrites property reinsurance products on a catastrophe excess of loss, per risk excess of loss and proportional basis; and aerospace and aviation, agriculture, composite, marine, technical lines, terrorism, trade credit, workers' compensation, and other specialty lines, as well as casualty and financial lines. The Insurance segment underwrites property, accident and health, agriculture, aviation, contingency, marine, and political lines insurance products; bankers blanket bond, commercial crime, computer crime, cyber- crime, professional indemnity, and directors' and officers' insurance products for various financial institutions and other companies; and commercial and institutional risks comprising general, professional, and product liability, as well as miscellaneous malpractice insurance products. This segment also underwrites marine and energy liability, and political risk insurance products, as well as insurance products for repair, maintenance, and upkeep of aircrafts and premises for small companies. The Asset Management segment manages capital for third parties through insurance-linked securities, and other property catastrophe and specialty reinsurance investments. Validus Holdings, Ltd. was founded in 2005 and is based in Pembroke, Bermuda.

Allstate Company Profile

The Allstate Corporation, through its subsidiaries, provides property and casualty, and other insurance products in the United States and Canada. The company operates through Allstate Protection, Service Businesses, Allstate Life, and Allstate Benefits segments. The Allstate Protection segment offers private passenger auto and homeowners insurance; specialty auto products, including motorcycle, trailer, motor home, and off-road vehicle insurance; other personal lines products, such as renter, condominium, landlord, boat, umbrella, and manufactured home insurance; and commercial lines products under the Allstate, Esurance, and Encompass brand names. The Service Businesses segment provides consumer electronics and appliance protection plans covering TVs, smartphones, and computers; device and mobile data collection services, analytics and customer risk assessment solutions, and telematics services; roadside assistance services, such as towing, jump-start, lockout, fuel delivery, and tire change services; and vehicle service contracts, guaranteed asset protection waivers, road hazard tire and wheel protection, and paintless dent repair protection services under the SquareTrade, Arity, Allstate Roadside Services, and Allstate Dealer Services brands. The Allstate Life Segment offers term, whole, interest-sensitive, and variable life insurance products, as well as non-proprietary retirement product solutions offered by third-party providers. Its Allstate Benefits segment provides life, accident, critical illness, short-term disability, and other health insurance products. The company sells its products through agencies, as well as directly through contact centers and Internet; and financial specialists, brokers, relationships with wholesale partners, and affinity groups. The Allstate Corporation was founded in 1931 and is headquartered in Northbrook, Illinois.

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