Cna Financial (NYSE:CNA) and Mercury General (NYSE:MCY) are both finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, institutional ownership, profitability and earnings.

Institutional & Insider Ownership

99.6% of Cna Financial shares are held by institutional investors. Comparatively, 43.3% of Mercury General shares are held by institutional investors. 0.2% of Cna Financial shares are held by company insiders. Comparatively, 34.2% of Mercury General shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Cna Financial and Mercury General, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cna Financial 0 0 0 0 N/A
Mercury General 0 1 0 0 2.00

Mercury General has a consensus price target of $50.00, indicating a potential upside of 34.34%. Given Mercury General’s higher possible upside, analysts plainly believe Mercury General is more favorable than Cna Financial.

Earnings & Valuation

This table compares Cna Financial and Mercury General’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cna Financial $10.77 billion 0.77 $1.00 billion $3.59 8.53
Mercury General $3.97 billion 0.52 $320.09 million $2.60 14.32

Cna Financial has higher revenue and earnings than Mercury General. Cna Financial is trading at a lower price-to-earnings ratio than Mercury General, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Cna Financial has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500. Comparatively, Mercury General has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500.

Profitability

This table compares Cna Financial and Mercury General’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cna Financial 9.29% 9.97% 1.99%
Mercury General 8.06% 8.13% 2.50%

Dividends

Cna Financial pays an annual dividend of $1.48 per share and has a dividend yield of 4.8%. Mercury General pays an annual dividend of $2.52 per share and has a dividend yield of 6.8%. Cna Financial pays out 41.2% of its earnings in the form of a dividend. Mercury General pays out 96.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Cna Financial has raised its dividend for 3 consecutive years and Mercury General has raised its dividend for 34 consecutive years. Mercury General is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Cna Financial beats Mercury General on 10 of the 15 factors compared between the two stocks.

Cna Financial Company Profile

CNA Financial Corporation provides commercial property and casualty insurance products primarily in the United States. It offers professional liability coverages and risk management services to various professional firms, including architects, real estate agents, and accounting and law firms; directors and officers, employment practices, fiduciary, and fidelity coverages to small and mid-size firms, public and privately held firms, and not-for-profit organizations; professional and general liability, as well as associated standard property and casualty coverages for healthcare industry; surety and fidelity bonds; and warranty and alternative risks products. The company also provides property insurance products, such as property, marine, boiler, and machinery coverages; casualty insurance products comprising workers' compensation, general and product liability, commercial auto, and umbrella coverages; specialized loss-sensitive insurance programs and total risk management services; and run-off long term policies. In addition, it offers long-tail exposures comprising commercial automobile liability, workers compensation, general and medical professional liability, other professional and management liability, and assumed reinsurance run-off and products liability; and short-tail exposures comprising property, commercial automobile physical damage, marine, surety, and warranty. The company markets its products through independent agents, brokers, and general underwriters to customers small, medium, and large businesses; insurance companies; associations; professionals; and other groups in the marine, oil and gas, construction, manufacturing, life science, property, financial services, healthcare, and technology industries. The company was founded in 1853 and is headquartered in Chicago, Illinois. CNA Financial Corporation operates as a subsidiary of Loews Corporation.

Mercury General Company Profile

Mercury General Corporation, together with its subsidiaries, engages in writing personal automobile insurance in the United States. The company also writes homeowners, commercial automobile, commercial property, mechanical protection, fire, and umbrella insurance. Its automobile insurance products cover collision, property damage, bodily injury, comprehensive, personal injury protection, underinsured and uninsured motorist, and other hazards; and homeowners' insurance products cover dwelling, liability, personal property, fire, and other hazards. The company sells its policies through a network of independent agents, 100% owned insurance agents, and direct channels in Arizona, California, Florida, Georgia, Illinois, Nevada, New Jersey, New York, Oklahoma, Texas, and Virginia. Mercury General Corporation was founded in 1961 and is headquartered in Los Angeles, California.

Receive News & Ratings for Cna Financial Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Cna Financial and related companies with MarketBeat.com's FREE daily email newsletter.