Heritage Insurance (NYSE:HRTG) and National General (NASDAQ:NGHC) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.
Earnings and Valuation
This table compares Heritage Insurance and National General’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Heritage Insurance||$480.17 million||0.89||$27.16 million||$1.38||10.32|
|National General||$4.61 billion||0.60||$207.35 million||$2.09||11.74|
National General has higher revenue and earnings than Heritage Insurance. Heritage Insurance is trading at a lower price-to-earnings ratio than National General, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings and recommmendations for Heritage Insurance and National General, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Heritage Insurance currently has a consensus target price of $17.75, suggesting a potential upside of 24.65%. National General has a consensus target price of $30.67, suggesting a potential upside of 24.97%. Given National General’s higher possible upside, analysts clearly believe National General is more favorable than Heritage Insurance.
Risk & Volatility
Heritage Insurance has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500. Comparatively, National General has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.
This table compares Heritage Insurance and National General’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
64.5% of Heritage Insurance shares are held by institutional investors. Comparatively, 52.4% of National General shares are held by institutional investors. 12.0% of Heritage Insurance shares are held by company insiders. Comparatively, 3.4% of National General shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Heritage Insurance pays an annual dividend of $0.24 per share and has a dividend yield of 1.7%. National General pays an annual dividend of $0.16 per share and has a dividend yield of 0.7%. Heritage Insurance pays out 17.4% of its earnings in the form of a dividend. National General pays out 7.7% 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. Heritage Insurance has increased its dividend for 2 consecutive years. Heritage Insurance is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
National General beats Heritage Insurance on 9 of the 17 factors compared between the two stocks.
About Heritage Insurance
Heritage Insurance Holdings, Inc., through its subsidiaries, provides personal and commercial residential insurance products. The company offers personal residential property insurance for single-family homeowners and condominium owners; rental property insurance; and commercial residential insurance in Alabama, Connecticut, Florida, Georgia, Hawaii, Massachusetts, New York, New Jersey, North Carolina, Rhode Island, and South Carolina, as well as residential wind-only property insurance. As of December 31, 2018, it had approximately 512,793 personal residential policies and 3,000 commercial residential policies. The company markets and writes its voluntary personal line policies through a network of retail independent agents, wholesale agents, and a partnership with a direct agency, as well as indirectly to approximately 1,500 retail locations through 8 wholesale agency relationships. It also provides restoration, and emergency and recovery services; and property management, retail agency, and reinsurance services. The company was founded in 2012 and is headquartered in Clearwater, Florida.
About National General
National General Holdings Corp., a specialty personal lines insurance holding company, provides various insurance products and services in the United States, Bermuda, Luxembourg, and Sweden. The company's Property and Casualty segment offers standard, preferred, and nonstandard automobile insurance products; and recreational vehicle (RV) insurance products that carry RV-specific endorsements comprising automatic personal effects coverage, optional replacement cost coverage, RV storage coverage, and full-time liability coverage. It also provides homeowners policies consisting of property and liability coverages for one-and two-family, and owner-occupied residences; and additional personal umbrella coverage to the homeowners. In addition, this segment offers small business automobile insurance products, which covers liability and physical damage caused by light-to-medium duty commercial vehicles; motorcycle insurance products for various types of motorcycles, golf carts, and all-terrain vehicles; and lender-placed insurance products, including fire, home, and flood products, as well as collateral protection insurance and guaranteed asset protection products for automobiles. It sells its products through retail store fronts, Web/mobile, phone contact centers, and kiosks; and agents and affinity partners. The company's Accident and Health segment provides accident and non-major medical health insurance products, such as accident/AD&D coverage in the event of bodily injury or death due to accidental means; hospital indemnity; short-term medical plans; cancer/critical illness policies; basic dental coverage; and life insurance products for individuals, as well as stop loss programs for employers. It sells its products through agents, managing general underwriters, employers, Internet; and directly. The company was formerly known as American Capital Acquisition Corporation. National General Holdings Corp. was founded in 1939 and is headquartered in New York, New York.
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