The Hanover Insurance Group (NYSE:THG) and James River Group (NASDAQ:JRVR) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, profitability, risk, dividends, institutional ownership and valuation.
Insider & Institutional Ownership
85.0% of The Hanover Insurance Group shares are owned by institutional investors. Comparatively, 97.6% of James River Group shares are owned by institutional investors. 2.2% of The Hanover Insurance Group shares are owned by insiders. Comparatively, 3.5% of James River Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares The Hanover Insurance Group and James River Group's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| The Hanover Insurance Group | $4.89 billion | 1.00 | $425.10 million | $8.16 | 16.43 |
| James River Group | $907.13 million | 1.72 | $38.34 million | $1.40 | 36.30 |
The Hanover Insurance Group has higher revenue and earnings than James River Group. The Hanover Insurance Group is trading at a lower price-to-earnings ratio than James River Group, indicating that it is currently the more affordable of the two stocks.
Dividends
The Hanover Insurance Group pays an annual dividend of $2.80 per share and has a dividend yield of 2.1%. James River Group pays an annual dividend of $1.20 per share and has a dividend yield of 2.4%. The Hanover Insurance Group pays out 34.3% of its earnings in the form of a dividend. James River Group pays out 85.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. The Hanover Insurance Group has increased its dividend for 10 consecutive years and James River Group has increased its dividend for 1 consecutive years.
Volatility and Risk
The Hanover Insurance Group has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, James River Group has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500.
Analyst Recommendations
This is a breakdown of recent ratings for The Hanover Insurance Group and James River Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| The Hanover Insurance Group | 0 | 2 | 3 | 0 | 2.60 |
| James River Group | 0 | 2 | 2 | 0 | 2.50 |
The Hanover Insurance Group presently has a consensus target price of $130.20, indicating a potential downside of 2.91%. James River Group has a consensus target price of $159.00, indicating a potential upside of 212.87%. Given James River Group's higher possible upside, analysts plainly believe James River Group is more favorable than The Hanover Insurance Group.
Profitability
This table compares The Hanover Insurance Group and James River Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| The Hanover Insurance Group | 6.35% | 10.90% | 2.54% |
| James River Group | 6.37% | 9.43% | 1.47% |
Summary
The Hanover Insurance Group beats James River Group on 10 of the 17 factors compared between the two stocks.
