ProAssurance (NYSE:PRA) and The Travelers Companies (NYSE:TRV) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, risk, earnings, dividends and valuation.
Risk & Volatility
ProAssurance has a beta of 0.26, indicating that its share price is 74% less volatile than the S&P 500. Comparatively, The Travelers Companies has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500.
Valuation & Earnings
This table compares ProAssurance and The Travelers Companies' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
ProAssurance | $999.83 million | 1.33 | $1 million | ($0.81) | -30.56 |
The Travelers Companies | $31.58 billion | 1.16 | $2.62 billion | $9.60 | 15.16 |
The Travelers Companies has higher revenue and earnings than ProAssurance. ProAssurance 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 ProAssurance and The Travelers Companies' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
ProAssurance | -27.87% | -6.92% | -2.09% |
The Travelers Companies | 7.13% | 8.63% | 2.04% |
Insider & Institutional Ownership
80.5% of ProAssurance shares are held by institutional investors. Comparatively, 81.8% of The Travelers Companies shares are held by institutional investors. 1.7% of ProAssurance shares are held by company insiders. Comparatively, 0.8% of The Travelers Companies shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Dividends
ProAssurance pays an annual dividend of $0.20 per share and has a dividend yield of 0.8%. The Travelers Companies pays an annual dividend of $3.40 per share and has a dividend yield of 2.3%. ProAssurance pays out -24.7% of its earnings in the form of a dividend. The Travelers Companies pays out 35.4% 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. ProAssurance has raised its dividend for 1 consecutive years and The Travelers Companies has raised its dividend for 16 consecutive years. The Travelers Companies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for ProAssurance and The Travelers Companies, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
ProAssurance | 1 | 3 | 1 | 0 | 2.00 |
The Travelers Companies | 3 | 10 | 5 | 0 | 2.11 |
ProAssurance presently has a consensus target price of $23.00, indicating a potential downside of 7.07%. The Travelers Companies has a consensus target price of $135.20, indicating a potential downside of 7.08%. Given ProAssurance's higher possible upside, equities analysts clearly believe ProAssurance is more favorable than The Travelers Companies.
Summary
The Travelers Companies beats ProAssurance on 13 of the 17 factors compared between the two stocks.