Hallmark Financial Services (NASDAQ:HALL) and Assurant (NYSE:AIZ) are both finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Profitability

This table compares Hallmark Financial Services and Assurant’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hallmark Financial Services -17.94% -8.63% -1.41%
Assurant 3.95% 10.23% 1.32%

Earnings and Valuation

This table compares Hallmark Financial Services and Assurant’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hallmark Financial Services $486.37 million 0.11 -$630,000.00 ($0.93) -3.19
Assurant $10.09 billion 0.69 $382.60 million $8.55 13.71

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

Volatility & Risk

Hallmark Financial Services has a beta of 1.39, suggesting that its stock price is 39% more volatile than the S&P 500. Comparatively, Assurant has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500.

Institutional and Insider Ownership

43.0% of Hallmark Financial Services shares are held by institutional investors. Comparatively, 94.7% of Assurant shares are held by institutional investors. 28.6% of Hallmark Financial Services shares are held by insiders. Comparatively, 0.6% of Assurant shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Hallmark Financial Services and Assurant, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hallmark Financial Services 0 1 1 0 2.50
Assurant 0 0 3 0 3.00

Hallmark Financial Services currently has a consensus price target of $7.00, indicating a potential upside of 135.69%. Assurant has a consensus price target of $148.67, indicating a potential upside of 26.78%. Given Hallmark Financial Services’ higher possible upside, research analysts plainly believe Hallmark Financial Services is more favorable than Assurant.

Summary

Assurant beats Hallmark Financial Services on 11 of the 14 factors compared between the two stocks.

About Hallmark Financial Services

Hallmark Financial Services, Inc., through its subsidiaries, underwrites, markets, distributes, and services property/casualty insurance products to businesses and individuals in the United States. The company operates in the Specialty Commercial, Standard Commercial, and Personal segments. The Specialty Commercial segment markets, underwrites, finances, and services commercial lines of insurance products, including commercial automobile, general liability, commercial property, commercial excess liability, and commercial umbrella insurance products. This segment also offers general aviation property/casualty insurance, such as aircraft insurance, airport liability insurance, and satellite launch and in-orbit coverage insurance products, as well as provides medical professional liability insurance products. The Standard Commercial segment offers standard commercial lines of insurance products primarily in the non-urban areas in the southwest and northwest regions of the United States. Its products include commercial automobile, general liability, umbrella, commercial property, commercial multi-peril, business owner's, and occupational accident insurance products. The Personal segment provides personal automobile and renters insurance products. The company markets its insurance products through independent general agents, retail agents, and specialty brokers. Hallmark Financial Services, Inc. was founded in 1987 and is headquartered in Fort Worth, Texas.

About Assurant

Assurant, Inc., through its subsidiaries, provides risk management solutions for housing and lifestyle markets in North America, Latin America, Europe, and the Asia Pacific. The company operates through three segments: Global Housing, Global Lifestyle, and Global Preneed. Its Global Housing segment provides lender-placed homeowners, manufactured housing, and flood insurance; and renters insurance and related products, as well as voluntary manufactured housing insurance, homeowners insurance, and other products. The Global Lifestyle segment offers mobile device protection products and related services, and extended service contracts for consumer electronics and appliances, as well as assistance services; vehicle protection and related services; and credit and other insurance services. Its Global Preneed segment provides pre-funded funeral insurance and annuity products. The company was formerly known as Fortis, Inc. and changed its name to Assurant, Inc. in February 2004. Assurant, Inc. was founded in 1892 and is headquartered in New York, New York.

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