United Insurance (NASDAQ:UIHC) and HCI Group (NYSE:HCI) are both small-cap finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, institutional ownership, valuation, earnings and profitability.
Volatility and Risk
United Insurance has a beta of 0.78, meaning that its share price is 22% less volatile than the S&P 500. Comparatively, HCI Group has a beta of 0.68, meaning that its share price is 32% less volatile than the S&P 500.
Earnings & Valuation
This table compares United Insurance and HCI Group's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| United Insurance | $825.12 million | 0.25 | $-29,870,000.00 | ($1.08) | -4.39 |
| HCI Group | $242.47 million | 1.74 | $26.58 million | $2.57 | 20.58 |
HCI Group has lower revenue, but higher earnings than United Insurance. United Insurance is trading at a lower price-to-earnings ratio than HCI Group, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares United Insurance and HCI Group's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| United Insurance | -3.07% | -5.01% | -1.02% |
| HCI Group | 8.27% | 11.99% | 2.61% |
Analyst Ratings
This is a summary of current ratings and price targets for United Insurance and HCI Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| United Insurance | 1 | 0 | 1 | 0 | 2.00 |
| HCI Group | 0 | 0 | 0 | 0 | N/A |
United Insurance presently has a consensus target price of $7.00, suggesting a potential upside of 47.68%. HCI Group has a consensus target price of $55.00, suggesting a potential upside of 3.99%. Given United Insurance's higher probable upside, research analysts plainly believe United Insurance is more favorable than HCI Group.
Dividends
United Insurance pays an annual dividend of $0.24 per share and has a dividend yield of 5.1%. HCI Group pays an annual dividend of $1.60 per share and has a dividend yield of 3.0%. United Insurance pays out -22.2% of its earnings in the form of a dividend. HCI Group pays out 62.3% 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. United Insurance has raised its dividend for 1 consecutive years and HCI Group has raised its dividend for 1 consecutive years. United Insurance is clearly the better dividend stock, given its higher yield and lower payout ratio.
Insider and Institutional Ownership
33.6% of United Insurance shares are owned by institutional investors. Comparatively, 61.3% of HCI Group shares are owned by institutional investors. 53.1% of United Insurance shares are owned by company insiders. Comparatively, 24.1% of HCI Group shares are owned by company 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
HCI Group beats United Insurance on 8 of the 15 factors compared between the two stocks.
