United Fire Group (NASDAQ: UFCS) and Endurance Specialty Holdings (NYSE:ENH) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.
This table compares United Fire Group and Endurance Specialty Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|United Fire Group||4.07%||4.33%||1.01%|
|Endurance Specialty Holdings||4.79%||1.62%||0.82%|
Volatility & Risk
United Fire Group has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500. Comparatively, Endurance Specialty Holdings has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500.
United Fire Group pays an annual dividend of $1.12 per share and has a dividend yield of 2.4%. Endurance Specialty Holdings pays an annual dividend of $1.52 per share and has a dividend yield of 1.6%. United Fire Group pays out 61.2% of its earnings in the form of a dividend. Endurance Specialty Holdings pays out 25.3% 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. United Fire Group has increased its dividend for 6 consecutive years. United Fire Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings & Valuation
This table compares United Fire Group and Endurance Specialty Holdings’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|United Fire Group||$1.16 billion||1.00||$59.36 million||$1.83||25.33|
|Endurance Specialty Holdings||N/A||N/A||N/A||$6.00||15.50|
United Fire Group has higher revenue and earnings than Endurance Specialty Holdings. Endurance Specialty Holdings is trading at a lower price-to-earnings ratio than United Fire Group, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
58.2% of United Fire Group shares are held by institutional investors. Comparatively, 82.7% of Endurance Specialty Holdings shares are held by institutional investors. 5.8% of United Fire Group shares are held by company insiders. Comparatively, 5.8% of Endurance Specialty Holdings shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This is a breakdown of current recommendations for United Fire Group and Endurance Specialty Holdings, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|United Fire Group||0||2||1||0||2.33|
|Endurance Specialty Holdings||0||3||0||0||2.00|
United Fire Group presently has a consensus price target of $46.33, suggesting a potential downside of 0.06%. Given United Fire Group’s stronger consensus rating and higher probable upside, analysts plainly believe United Fire Group is more favorable than Endurance Specialty Holdings.
United Fire Group beats Endurance Specialty Holdings on 10 of the 14 factors compared between the two stocks.
About United Fire Group
United Fire Group, Inc., formerly United Fire & Casualty Company, is engaged in the business of writing property and casualty insurance and life insurance and selling annuities. The Company operates in two segments: property and casualty insurance, and life insurance. The Company’s property and casualty insurance segment consists of commercial lines insurance, including surety bonds, personal lines insurance and assumed insurance. Its life insurance segment consists of deferred and immediate annuities, universal life insurance products and traditional life insurance products. Its life insurance segment consists solely of the operations of United Life Insurance Company. On February 1, 2012, the Company completed a holding company reorganization of United Fire Group, Inc., United Fire & Casualty Company and UFC MergeCo, Inc. On March 28, 2011, the Company acquired Mercer Insurance Group, Inc. (Mercer Insurance Group).
About Endurance Specialty Holdings
Endurance Specialty Holdings Ltd. is a holding company. The Company, through its operating subsidiaries in Bermuda, the United States and the United Kingdom, focuses on underwriting specialty lines of personal and commercial property, and casualty insurance and reinsurance. It operates through two segments: Insurance and Reinsurance. In the Insurance segment, it writes agriculture, casualty and other specialty, professional lines, and property, marine/energy and aviation insurance. In the Reinsurance segment, it writes catastrophe, property, casualty, professional lines and specialty reinsurance. Its Insurance and Reinsurance segments both include property-related coverages, which provide insurance or reinsurance of an insurable interest in tangible property for property loss, damage or loss of use. In addition, its Insurance and Reinsurance segments include various casualty insurance and reinsurance coverages, which are concerned with the losses caused by injuries to third parties.
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