Head to Head Analysis: Alterra Capital Holdings (ALTE) and Alleghany Corporation (Y)

Alterra Capital Holdings (NASDAQ: ALTE) and Alleghany Corporation (NYSE:Y) are both mid-cap property & casualty insurance – nec companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares Alterra Capital Holdings and Alleghany Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alterra Capital Holdings N/A N/A N/A
Alleghany Corporation 0.10% -0.14% -0.05%

Valuation & Earnings

This table compares Alterra Capital Holdings and Alleghany Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Alterra Capital Holdings N/A N/A N/A $1.65 0.55
Alleghany Corporation $6.13 billion 1.42 $456.92 million ($0.13) -4,358.46

Alleghany Corporation has higher revenue and earnings than Alterra Capital Holdings. Alleghany Corporation is trading at a lower price-to-earnings ratio than Alterra Capital Holdings, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

81.0% of Alleghany Corporation shares are owned by institutional investors. 4.0% of Alleghany Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Alterra Capital Holdings and Alleghany Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alterra Capital Holdings 0 0 0 0 N/A
Alleghany Corporation 0 1 1 0 2.50

Alleghany Corporation has a consensus price target of $625.00, suggesting a potential upside of 10.31%. Given Alleghany Corporation’s higher probable upside, analysts clearly believe Alleghany Corporation is more favorable than Alterra Capital Holdings.

Summary

Alleghany Corporation beats Alterra Capital Holdings on 6 of the 9 factors compared between the two stocks.

Alterra Capital Holdings Company Profile

Alterra Capital Holdings Limited (Alterra) is engaged in providing diversified specialty insurance and reinsurance products to corporations, public entities and property and casualty insurers. In Bermuda, the Company conducts its insurance and reinsurance operations through Alterra Bermuda. In Europe, the Company conducts its non-Lloyd’s operations primarily from Dublin, Ireland through Alterra Europe. In the United States, the Company’s U.S. reinsurance operations are conducted through Alterra Re USA, a Connecticut-domiciled reinsurance company. The Company’s U.S. insurance operations are conducted through Alterra E&S. In Latin America, the Company provides reinsurance to clients through Alterra at Lloyd’s in Rio de Janeiro, Brazil, using Lloyd’s admitted status, through Alterra Europe. In June 2012, the Company formed New Point V Limited. On May 1, 2013, Alterra Capital was acquired by Markel Corporation.

Alleghany Corporation Company Profile

Alleghany Corporation is an insurance holding company. The Company, through its subsidiary Alleghany Insurance Holdings LLC (AIHL) and its subsidiaries, is engaged in the property and casualty insurance business. AIHL’s insurance operations are conducted by its subsidiaries RSUI Group, Inc. (RSUI), CapSpecialty, Inc. (CapSpecialty) and Pacific Compensation Corporation (PacificComp). Its segments include reinsurance and insurance. Its reinsurance segment consists of property and casualty reinsurance operations conducted by Transatlantic Holdings, Inc. reinsurance operating subsidiaries. Its insurance segment consists of property and casualty insurance operations conducted by AIHL through its insurance operating subsidiaries RSUI, CapSpecialty and PacificComp. AIHL Re LLC, which is a captive reinsurance company, provides reinsurance to its insurance operating subsidiaries and affiliates.

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