The Travelers Companies (NYSE:TRV) and United Fire Group (NASDAQ:UFCS) are both finance companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, risk, institutional ownership, valuation, dividends and profitability.
Institutional and Insider Ownership
81.8% of The Travelers Companies shares are owned by institutional investors. Comparatively, 60.0% of United Fire Group shares are owned by institutional investors. 0.8% of The Travelers Companies shares are owned by insiders. Comparatively, 6.9% of United Fire Group 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.
Volatility & Risk
The Travelers Companies has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, United Fire Group has a beta of 0.15, suggesting that its share price is 85% less volatile than the S&P 500.
Profitability
This table compares The Travelers Companies and United Fire Group'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% |
United Fire Group | -12.08% | -7.65% | -2.17% |
Dividends
The Travelers Companies pays an annual dividend of $3.40 per share and has a dividend yield of 2.3%. United Fire Group pays an annual dividend of $0.60 per share and has a dividend yield of 2.0%. The Travelers Companies pays out 35.4% of its earnings in the form of a dividend. United Fire Group pays out -55.6% 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 raised its dividend for 16 consecutive years and United Fire Group has raised 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.
Analyst Ratings
This is a breakdown of recent recommendations for The Travelers Companies and United Fire Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
The Travelers Companies | 3 | 10 | 5 | 0 | 2.11 |
United Fire Group | 0 | 2 | 0 | 0 | 2.00 |
The Travelers Companies currently has a consensus target price of $135.20, indicating a potential downside of 7.08%. United Fire Group has a consensus target price of $28.00, indicating a potential downside of 4.92%. Given United Fire Group's higher probable upside, analysts clearly believe United Fire Group is more favorable than The Travelers Companies.
Valuation & Earnings
This table compares The Travelers Companies and United Fire Group's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
The Travelers Companies | $31.58 billion | 1.16 | $2.62 billion | $9.60 | 15.16 |
United Fire Group | $1.20 billion | 0.61 | $14.82 million | ($1.08) | -27.27 |
The Travelers Companies has higher revenue and earnings than United Fire Group. United Fire Group 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.
Summary
The Travelers Companies beats United Fire Group on 14 of the 17 factors compared between the two stocks.