National General (NASDAQ:NGHC) and Hanover Insurance Group (NYSE:THG) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, risk, earnings, dividends, analyst recommendations, institutional ownership and profitability.
This table compares National General and Hanover Insurance Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hanover Insurance Group||9.27%||10.62%||2.57%|
National General pays an annual dividend of $0.20 per share and has a dividend yield of 1.0%. Hanover Insurance Group pays an annual dividend of $2.40 per share and has a dividend yield of 1.8%. National General pays out 9.6% of its earnings in the form of a dividend. Hanover Insurance Group pays out 35.3% 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.
This is a summary of recent ratings and price targets for National General and Hanover Insurance Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hanover Insurance Group||0||0||2||0||3.00|
National General presently has a consensus price target of $33.00, suggesting a potential upside of 58.43%. Hanover Insurance Group has a consensus price target of $118.71, suggesting a potential downside of 11.67%. Given National General’s higher probable upside, research analysts plainly believe National General is more favorable than Hanover Insurance Group.
Insider & Institutional Ownership
51.6% of National General shares are owned by institutional investors. Comparatively, 84.9% of Hanover Insurance Group shares are owned by institutional investors. 3.4% of National General shares are owned by company insiders. Comparatively, 1.7% of Hanover Insurance Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Volatility & Risk
National General has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, Hanover Insurance Group has a beta of 0.55, suggesting that its stock price is 45% less volatile than the S&P 500.
Valuation and Earnings
This table compares National General and Hanover Insurance Group’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|National General||$4.61 billion||0.51||$207.35 million||$2.09||9.97|
|Hanover Insurance Group||$4.49 billion||1.18||$391.00 million||$6.79||19.79|
Hanover Insurance Group has lower revenue, but higher earnings than National General. National General is trading at a lower price-to-earnings ratio than Hanover Insurance Group, indicating that it is currently the more affordable of the two stocks.
Hanover Insurance Group beats National General on 8 of the 15 factors compared between the two stocks.
National General Company Profile
National General Holdings Corp., a specialty personal lines insurance holding company, provides various insurance products and services in the United States, Bermuda, Luxembourg, and Sweden. The company's Property and Casualty segment offers standard, preferred, and nonstandard automobile insurance products; and recreational vehicle (RV) insurance products that carry RV-specific endorsements comprising automatic personal effects coverage, optional replacement cost coverage, RV storage coverage, and full-time liability coverage. It also provides homeowners policies consisting of property and liability coverages for one-and two-family, and owner-occupied residences; and additional personal umbrella coverage to the homeowners. In addition, this segment offers small business automobile insurance products, which covers liability and physical damage caused by light-to-medium duty commercial vehicles; motorcycle insurance products for various types of motorcycles, golf carts, and all-terrain vehicles; and lender-placed insurance products, including fire, home, and flood products, as well as collateral protection insurance and guaranteed asset protection products for automobiles. It sells its products through retail store fronts, Web/mobile, phone contact centers, and kiosks; and agents and affinity partners. The company's Accident and Health segment provides accident and non-major medical health insurance products, such as accident/AD&D coverage in the event of bodily injury or death due to accidental means; hospital indemnity; short-term medical plans; cancer/critical illness policies; basic dental coverage; and life insurance products for individuals, as well as stop loss programs for employers. It sells its products through agents, managing general underwriters, employers, Internet; and directly. The company was formerly known as American Capital Acquisition Corporation. National General Holdings Corp. was founded in 1939 and is headquartered in New York, New York.
Hanover Insurance Group Company Profile
The Hanover Insurance Group, Inc., through its subsidiaries, provides various property and casualty insurance products and services in the United States. The company operates in three segments: Commercial Lines, Personal Lines, and Other. The Commercial Lines segment offers commercial multiple peril, commercial automobile, workers' compensation, umbrella, healthcare, mono-line general liability, and miscellaneous commercial property insurance products; and other commercial coverages, including inland marine, specialty program business, management and professional liability, surety, and specialty property. The Personal Lines segment provides personal automobile and homeowner's coverages, as well as other personal coverages, such as personal inland marine, umbrella, fire, personal watercraft, earthquake, and other miscellaneous coverages. The Other segment offers investment management and advisory services to institutions, pension funds, and other organizations. The company markets its products and services through independent agents and brokers. The Hanover Insurance Group, Inc. was founded in 1852 and is headquartered in Worcester, Massachusetts.
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