The Travelers Companies (NYSE:TRV) and AMERISAFE (NASDAQ:AMSF) are both finance companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, earnings, institutional ownership, analyst recommendations and dividends.
Dividends
The Travelers Companies pays an annual dividend of $3.40 per share and has a dividend yield of 2.3%. AMERISAFE pays an annual dividend of $1.08 per share and has a dividend yield of 1.8%. The Travelers Companies pays out 35.4% of its earnings in the form of a dividend. AMERISAFE pays out 23.5% 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. The Travelers Companies has increased its dividend for 16 consecutive years and AMERISAFE has increased its dividend for 1 consecutive years. The Travelers Companies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
The Travelers Companies has a beta of 0.77, meaning that its stock price is 23% less volatile than the S&P 500. Comparatively, AMERISAFE has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500.
Earnings & Valuation
This table compares The Travelers Companies and AMERISAFE's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
The Travelers Companies | $31.58 billion | 1.19 | $2.62 billion | $9.60 | 15.52 |
AMERISAFE | $370.37 million | 3.15 | $92.69 million | $4.60 | 13.10 |
The Travelers Companies has higher revenue and earnings than AMERISAFE. AMERISAFE is trading at a lower price-to-earnings ratio than The Travelers Companies, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares The Travelers Companies and AMERISAFE's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
The Travelers Companies | 7.13% | 8.63% | 2.04% |
AMERISAFE | 26.84% | 20.22% | 5.99% |
Analyst Recommendations
This is a breakdown of recent ratings and price targets for The Travelers Companies and AMERISAFE, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
The Travelers Companies | 3 | 10 | 5 | 0 | 2.11 |
AMERISAFE | 0 | 1 | 1 | 0 | 2.50 |
The Travelers Companies presently has a consensus price target of $135.20, indicating a potential downside of 9.27%. AMERISAFE has a consensus price target of $72.00, indicating a potential upside of 19.44%. Given AMERISAFE's stronger consensus rating and higher possible upside, analysts clearly believe AMERISAFE is more favorable than The Travelers Companies.
Institutional and Insider Ownership
81.8% of The Travelers Companies shares are owned by institutional investors. Comparatively, 98.5% of AMERISAFE shares are owned by institutional investors. 0.8% of The Travelers Companies shares are owned by insiders. Comparatively, 1.7% of AMERISAFE shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Summary
AMERISAFE beats The Travelers Companies on 9 of the 17 factors compared between the two stocks.