Selective Insurance Group (NASDAQ: SIGI) and Berkshire Hathaway (NYSE:BRK.B) are both finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, valuation, profitability, analyst recommendations, dividends, earnings and institutional ownership.
Selective Insurance Group pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. Berkshire Hathaway does not pay a dividend. Selective Insurance Group pays out 25.3% of its earnings in the form of a dividend.
Institutional & Insider Ownership
78.7% of Selective Insurance Group shares are owned by institutional investors. Comparatively, 36.9% of Berkshire Hathaway shares are owned by institutional investors. 3.0% of Selective Insurance Group shares are owned by insiders. Comparatively, 6.1% of Berkshire Hathaway shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
This is a summary of current ratings and price targets for Selective Insurance Group and Berkshire Hathaway, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Selective Insurance Group||0||3||0||0||2.00|
Selective Insurance Group presently has a consensus price target of $60.50, indicating a potential downside of 0.17%. Berkshire Hathaway has a consensus price target of $201.33, indicating a potential downside of 2.73%. Given Selective Insurance Group’s higher probable upside, research analysts clearly believe Selective Insurance Group is more favorable than Berkshire Hathaway.
This table compares Selective Insurance Group and Berkshire Hathaway’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Selective Insurance Group||6.83%||11.11%||2.43%|
Risk & Volatility
Selective Insurance Group has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500. Comparatively, Berkshire Hathaway has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.
Valuation and Earnings
This table compares Selective Insurance Group and Berkshire Hathaway’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Selective Insurance Group||$2.47 billion||1.44||$168.82 million||$2.85||21.26|
|Berkshire Hathaway||$242.14 billion||2.11||$44.94 billion||$10,178.62||0.02|
Berkshire Hathaway has higher revenue and earnings than Selective Insurance Group. Berkshire Hathaway is trading at a lower price-to-earnings ratio than Selective Insurance Group, indicating that it is currently the more affordable of the two stocks.
Berkshire Hathaway beats Selective Insurance Group on 9 of the 16 factors compared between the two stocks.
Selective Insurance Group Company Profile
Selective Insurance Group, Inc. is a holding company. As of December 31, 2016, the Company had 10 insurance subsidiaries, nine of which were licensed by various state departments of insurance to write specific lines of property and casualty insurance business. The remaining subsidiary is authorized by various state insurance departments to write property and casualty insurance in the excess and surplus lines (E&S) market. Its segments include Standard Commercial Lines, which consists of insurance products and services provided in the standard marketplace; Standard Personal Lines, which consists of insurance products and services, including flood insurance coverage that it writes through the National Flood Insurance Program (NFIP); E&S Lines, which consists of insurance products and services provided to customers not obtaining coverage in the standard marketplace, and investment segment invests insurance premiums, as well as amounts generated through its capital management strategies.
Berkshire Hathaway Company Profile
Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in various business activities. Its segments include Insurance, such as GEICO, Berkshire Hathaway Primary Group, General Re Corporation and Berkshire Hathaway Reinsurance Group; Burlington Northern Santa Fe, LLC, which is engaged in the operation of the railroad system; Berkshire Hathaway Energy, which includes regulated electric and gas utility; Manufacturing, which includes manufacturers of various products, including industrial, consumer and building products; McLane Company, which is engaged in the wholesale distribution of groceries and non-food items; Service and retailing, which includes providers of various services, including fractional aircraft ownership programs, aviation pilot training and various retailing businesses, and Finance and financial products, which includes manufactured housing and related consumer financing, transportation equipment, manufacturing and leasing, and furniture leasing.
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