Allied World Assurance Company Hldgs (NYSE: AWH) and Employers Holdings (NYSE:EIG) are both financials companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.
This is a breakdown of recent ratings and target prices for Allied World Assurance Company Hldgs and Employers Holdings, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Allied World Assurance Company Hldgs||0||5||0||0||2.00|
Allied World Assurance Company Hldgs presently has a consensus price target of $39.25, indicating a potential downside of 20.29%. Employers Holdings has a consensus price target of $44.50, indicating a potential downside of 7.77%. Given Employers Holdings’ higher possible upside, analysts plainly believe Employers Holdings is more favorable than Allied World Assurance Company Hldgs.
Risk and Volatility
Allied World Assurance Company Hldgs has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Employers Holdings has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.
This table compares Allied World Assurance Company Hldgs and Employers Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Allied World Assurance Company Hldgs||12.56%||8.96%||2.42%|
Earnings & Valuation
This table compares Allied World Assurance Company Hldgs and Employers Holdings’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Allied World Assurance Company Hldgs||N/A||N/A||N/A||$2.97||16.58|
|Employers Holdings||$779.80 million||2.01||$106.70 million||$3.19||15.13|
Employers Holdings has higher revenue and earnings than Allied World Assurance Company Hldgs. Employers Holdings is trading at a lower price-to-earnings ratio than Allied World Assurance Company Hldgs, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
86.5% of Allied World Assurance Company Hldgs shares are owned by institutional investors. Comparatively, 77.5% of Employers Holdings shares are owned by institutional investors. 3.2% of Allied World Assurance Company Hldgs shares are owned by company insiders. Comparatively, 4.0% of Employers Holdings shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Employers Holdings pays an annual dividend of $0.60 per share and has a dividend yield of 1.2%. Allied World Assurance Company Hldgs does not pay a dividend. Employers Holdings pays out 18.8% of its earnings in the form of a dividend. Employers Holdings has raised its dividend for 3 consecutive years.
Employers Holdings beats Allied World Assurance Company Hldgs on 10 of the 13 factors compared between the two stocks.
About Allied World Assurance Company Hldgs
Allied World Assurance Company Holdings Ltd is a Germany-based holding company. It provides property, casualty and specialty insurance and reinsurance solutions to clients around the world. The Company operates in three segments: North American Insurance, Global Markets Insurance and Reinsurance. The North American Insurance segment consists of the Company’s direct insurance operations in the United States, Bermuda and Canada. The Global Markets Insurance segment includes all of the Company’s direct insurance operations outside of North America. The Company’s reinsurance segment includes the reinsurance of property, general casualty, professional liability, specialty lines and property catastrophe coverage’s written by other reinsurance companies. The Company leases space in Australia, Bermuda, Canada, Hong Kong, Ireland, Labuan, Singapore, the United Kingdom and the United States for the operation of its North American Insurance, Global Markets Insurance and Reinsurance segments.
About Employers Holdings
Employers Holdings, Inc. is a holding company. Through its insurance subsidiaries, the Company provides workers’ compensation insurance coverage to select, small businesses in low to medium hazard industries. It provides workers’ compensation insurance under a statutory system wherein employers are required to provide coverage for their employees’ medical, disability, vocational rehabilitation, and/or death benefit costs for work-related injuries or illnesses. As of December 31, 2016 the Company provided workers’ compensation insurance in 36 states and the District of Columbia, with a concentration in California. Its insurance subsidiaries include Employers Insurance Company of Nevada (EICN), Employers Compensation Insurance Company (ECIC), Employers Preferred Insurance Company (EPIC) and Employers Assurance Company (EAC). The Company’s insurance products are jointly offered and marketed with and through its partners and alliances.
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