Selective Insurance Group (NASDAQ:SIGI) vs. HCI Group (NYSE:HCI) Head-To-Head Review

Selective Insurance Group (NASDAQ:SIGI) and HCI Group (NYSE:HCI) are both mid-cap finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Profitability

This table compares Selective Insurance Group and HCI Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Selective Insurance Group	9.40%	15.60%	3.41%
HCI Group	33.48%	28.49%	12.65%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Selective Insurance Group and HCI Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Selective Insurance Group	1	3	3	0	2.29
HCI Group	0	1	5	1	3.00

Selective Insurance Group presently has a consensus price target of $101.83, suggesting a potential upside of 2.41%. HCI Group has a consensus price target of $250.00, suggesting a potential upside of 34.44%. Given HCI Group’s stronger consensus rating and higher possible upside, analysts clearly believe HCI Group is more favorable than Selective Insurance Group.

Institutional and Insider Ownership

82.9% of Selective Insurance Group shares are held by institutional investors. Comparatively, 87.0% of HCI Group shares are held by institutional investors. 0.8% of Selective Insurance Group shares are held by insiders. Comparatively, 18.5% of HCI Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Selective Insurance Group pays an annual dividend of $1.72 per share and has a dividend yield of 1.7%. HCI Group pays an annual dividend of $1.60 per share and has a dividend yield of 0.9%. Selective Insurance Group pays out 20.7% of its earnings in the form of a dividend. HCI Group pays out 6.9% 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. Selective Insurance Group has raised its dividend for 11 consecutive years. Selective Insurance Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Selective Insurance Group has a beta of 0.22, suggesting that its stock price is 78% less volatile than the S&P 500. Comparatively, HCI Group has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Earnings & Valuation

This table compares Selective Insurance Group and HCI Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Selective Insurance Group	$5.34 billion	1.10	$466.41 million	$8.32	11.95
HCI Group	$900.95 million	2.57	$299.01 million	$23.20	8.02

Selective Insurance Group has higher revenue and earnings than HCI Group. HCI Group is trading at a lower price-to-earnings ratio than Selective Insurance Group, indicating that it is currently the more affordable of the two stocks.

Summary

HCI Group beats Selective Insurance Group on 13 of the 18 factors compared between the two stocks.

About Selective Insurance Group

Selective Insurance Group, Inc., together with its subsidiaries, provides insurance products and services in the United States. The company operates through four segments: Standard Commercial Lines, Standard Personal Lines, E&S Lines, and Investments. It offers casualty insurance products that covers the financial consequences of employee injuries in the course of employment and bodily injury and/or property damage to a third party; property insurance products, which covers the accidental loss of an insured's real property, personal property, and/or earnings due to the property's loss; and flood insurance products. The company also invests in fixed income investments and commercial mortgage loans, as well as equity securities, short-term investments, and alternative investments, and other investments. It offers its insurance products and services to businesses, non-profit organizations, local government agencies, and individuals through independent retail agents and wholesale general agents. The company was founded in 1926 and is headquartered in Branchville, New Jersey.

About HCI Group

HCI Group, Inc., together with its subsidiaries, engages in the property and casualty insurance, insurance management, reinsurance, real estate, and information technology businesses in Florida. It provides residential insurance products, such as homeowners, fire, flood, and wind-only insurance to homeowners, condominium owners, and tenants for properties, as well as offers reinsurance programs. The company also owns and operates waterfront properties and retail shopping centers, and an office building, as well as commercial properties for investment purposes. In addition, it designs and develops web-based applications and products for mobile devices, including SAMS, an online policy administration platform; Harmony, a policy administration platform; ClaimColony, an end-to-end claims management platform; and AtlasViewer, a mapping and data visualization platform. The company was formerly known as Homeowners Choice, Inc. and changed its name to HCI Group, Inc. in May 2013. HCI Group, Inc. was incorporated in 2006 and is headquartered in Tampa, Florida.