Tokio Marine (OTCMKTS:TKOMY) and Federated National (NASDAQ:FNHC) are both finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Profitability

This table compares Tokio Marine and Federated National’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tokio Marine 5.00% 8.11% 1.32%
Federated National 0.89% 4.07% 0.93%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Tokio Marine and Federated National, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tokio Marine 0 0 0 0 N/A
Federated National 0 1 1 0 2.50

Federated National has a consensus price target of $27.00, indicating a potential upside of 90.27%. Given Federated National’s higher probable upside, analysts plainly believe Federated National is more favorable than Tokio Marine.

Dividends

Tokio Marine pays an annual dividend of $1.34 per share and has a dividend yield of 2.7%. Federated National pays an annual dividend of $0.32 per share and has a dividend yield of 2.3%. Tokio Marine pays out 34.6% of its earnings in the form of a dividend. Federated National pays out 22.9% 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.

Institutional and Insider Ownership

0.1% of Tokio Marine shares are owned by institutional investors. Comparatively, 64.3% of Federated National shares are owned by institutional investors. 10.5% of Federated National 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.

Valuation and Earnings

This table compares Tokio Marine and Federated National’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tokio Marine $49.73 billion 0.75 $2.49 billion $3.87 12.90
Federated National $396.09 million 0.46 $14.93 million $1.40 10.14

Tokio Marine has higher revenue and earnings than Federated National. Federated National is trading at a lower price-to-earnings ratio than Tokio Marine, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Tokio Marine has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, Federated National has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Summary

Tokio Marine beats Federated National on 9 of the 15 factors compared between the two stocks.

Tokio Marine Company Profile

Tokio Marine Holdings, Inc., together with its subsidiaries, engages in non-life and life insurance, international insurance, and financial and general businesses worldwide. The company provides business, fire, Internet and mobile, rental housing, and natural catastrophe risk insurance services, as well as insurance for retail and corporate fields. It also provides property investment, insurance agency and risk consulting, human resource, in-home care and nursing care information, healthcare/medical, call center, and real estate-related services. Tokio Marine Holdings, Inc. serves individuals, small to medium sized non-profit organizations, schools, or churches. The company was formerly known as Millea Holdings, Inc. and changed its name to Tokio Marine Holdings, Inc. in 2008. Tokio Marine Holdings, Inc. was founded in 1879 and is headquartered in Tokyo, Japan.

Federated National Company Profile

FedNat Holding Company, through its subsidiaries, engages in the insurance underwriting, distribution, and claims processing business in the United States. The company is involved in the homeowners, and fire property and casualty insurance; and personal automobile insurance businesses, as well as commercial general liability and federal flood businesses. It markets and distributes its own and third-party insurers' products, and other services through a network of independent and general agents. The company was formerly known as Federated National Holding Company and changed its name to FedNat Holding Company in May 2018. FedNat Holding Company was founded in 1991 and is based in Sunrise, Florida.

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