Analyzing RLI (NYSE:RLI) and Safety Insurance Group (SAFT)

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Safety Insurance Group (NASDAQ:SAFT) and RLI (NYSE:RLI) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, earnings, profitability, institutional ownership, dividends, analyst recommendations and valuation.

Profitability

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

Net Margins Return on Equity Return on Assets
Safety Insurance Group 7.73% 9.74% 3.72%
RLI 12.91% 9.13% 2.64%

Earnings and Valuation

This table compares Safety Insurance Group and RLI’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Safety Insurance Group $839.11 million 1.53 $62.38 million N/A N/A
RLI $797.22 million 3.93 $105.02 million $1.61 43.93

RLI has lower revenue, but higher earnings than Safety Insurance Group.

Dividends

Safety Insurance Group pays an annual dividend of $3.20 per share and has a dividend yield of 3.8%. RLI pays an annual dividend of $0.88 per share and has a dividend yield of 1.2%. RLI pays out 54.7% of its earnings in the form of a dividend. RLI has raised its dividend for 41 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations for Safety Insurance Group and RLI, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Safety Insurance Group 0 1 0 0 2.00
RLI 0 3 0 0 2.00

Safety Insurance Group currently has a consensus price target of $70.00, suggesting a potential downside of 16.57%. RLI has a consensus price target of $60.00, suggesting a potential downside of 15.16%. Given RLI’s higher probable upside, analysts plainly believe RLI is more favorable than Safety Insurance Group.

Risk & Volatility

Safety Insurance Group has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, RLI has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500.

Institutional & Insider Ownership

80.2% of Safety Insurance Group shares are owned by institutional investors. Comparatively, 85.8% of RLI shares are owned by institutional investors. 4.9% of Safety Insurance Group shares are owned by insiders. Comparatively, 5.5% of RLI shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

RLI beats Safety Insurance Group on 9 of the 14 factors compared between the two stocks.

About Safety Insurance Group

Safety Insurance Group, Inc. provides private passenger and commercial automobile insurance in Massachusetts, New Hampshire, and Maine, the United States. The company's private passenger automobile policies offer coverage for bodily injury and property damage to others, no-fault personal injury coverage for the insured/insured's car occupants, and physical damage coverage for an insured's own vehicle for collision or other perils. It also provides commercial automobile policies that offer insurance for commercial vehicles used for business purposes, including private passenger-type vehicles, trucks, tractors and trailers, insure individual vehicles, and commercial fleets; and homeowners policies, which provide coverage for homes, condominiums, and apartments for losses to a dwelling and its contents from various perils, and coverage for liability to others arising from ownership or occupancy. In addition, the company offers business owners policies that cover apartments and residential condominiums, restaurants, office condominiums, processing and services businesses, special trade contractors, and wholesalers. Further, it provides personal umbrella policies, which provide personal excess liability coverage over and above the limits of individual automobile, watercraft, and homeowner's insurance policies; and commercial umbrella policies, as well as underwrites dwelling fire insurance for non-owner occupied residences. Additionally, the company offers inland marine coverage for homeowners and business owner policies; and watercraft coverage for small and medium sized pleasure crafts. It distributes its products through independent agents. The company was formerly known as Safety Holdings Inc and changed its name to Safety Insurance Group, Inc. in April 2002. Safety Insurance Group, Inc. was founded in 1979 and is based in Boston, Massachusetts.

About RLI

RLI Corp., an insurance holding company, underwrites property and casualty insurance in the United States and internationally. Its Casualty segment provides commercial and personal coverage products; and general liability products, such as coverage for third-party liability of commercial insureds, including manufacturers, contractors, apartments, real estate investment trusts, and mercantile. This segment also offers coverages for security guards and in the areas of onshore energy-related businesses and environmental liability for underground storage tanks, contractors and asbestos, and environmental remediation specialists; and professional liability coverages focuses on providing errors and omission coverage to small to medium-sized design, technical, computer, and miscellaneous professionals. In addition, this segment provides commercial automobile liability and physical damage insurance to local, intermediate and long haul truckers, public transportation entities, and equipment dealers; incidental, related insurance coverages; inland marine coverages; management liability coverages, such as directors and officers liability insurance, fiduciary liability and fidelity coverages, and for low to moderate classes of risks, including public and private businesses; healthcare liability coverages; and home business insurance products. The company's Property segment offers commercial property, marine, homeowners', and other property insurance products. Its Surety segment offers small bonds for businesses and individuals; bonds for small to medium-sized contractors; commercial surety bonds for medium-to-large businesses; and commercial surety bonds for the energy, petrochemical, and refining industries. The company also underwrites various reinsurance coverages. The company markets its products through branch offices and independent agents. RLI Corp. was founded in 1965 and is headquartered in Peoria, Illinois.

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