Employers (NYSE:EIG – Get Free Report) and Selective Insurance Group (NASDAQ:SIGI – Get Free Report) are both finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.
Dividends
Employers pays an annual dividend of $1.20 per share and has a dividend yield of 2.5%. Selective Insurance Group pays an annual dividend of $1.40 per share and has a dividend yield of 1.5%. Employers pays out 25.4% of its earnings in the form of a dividend. Selective Insurance Group pays out 24.7% 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.
Analyst Ratings
This is a breakdown of current recommendations and price targets for Employers and Selective Insurance Group, as reported by MarketBeat.com.
Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
Employers | 0 | 2 | 1 | 0 | 2.33 |
Selective Insurance Group | 1 | 4 | 2 | 0 | 2.14 |
Insider & Institutional Ownership
80.5% of Employers shares are owned by institutional investors. Comparatively, 82.9% of Selective Insurance Group shares are owned by institutional investors. 1.5% of Employers shares are owned by insiders. Comparatively, 1.5% of Selective Insurance Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Profitability
This table compares Employers and Selective Insurance Group’s net margins, return on equity and return on assets.
Net Margins | Return on Equity | Return on Assets | |
Employers | 13.76% | 9.95% | 2.79% |
Selective Insurance Group | 5.12% | 8.75% | 1.96% |
Volatility & Risk
Employers has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500. Comparatively, Selective Insurance Group has a beta of 0.56, meaning that its share price is 44% less volatile than the S&P 500.
Earnings & Valuation
This table compares Employers and Selective Insurance Group”s gross revenue, earnings per share and valuation.
Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
Employers | $869.30 million | 1.40 | $118.10 million | $4.72 | 10.18 |
Selective Insurance Group | $4.55 billion | 1.23 | $365.24 million | $5.66 | 16.34 |
Selective Insurance Group has higher revenue and earnings than Employers. Employers is trading at a lower price-to-earnings ratio than Selective Insurance Group, indicating that it is currently the more affordable of the two stocks.
Summary
Selective Insurance Group beats Employers on 8 of the 15 factors compared between the two stocks.
About Employers
Employers Holdings, Inc., through its subsidiaries, operates in the commercial property and casualty insurance industry primarily in the United States. The company operates in two segments, Employers and Cerity. It offers workers’ compensation insurance to small businesses in low to medium hazard industries under the Employers and Cerity brands. The company markets its products through local, regional, and national agents and brokers; alternative distribution channels; and national, regional, and local trade groups and associations, as well as directly to customers. Employers Holdings, Inc. was founded in 2000 and is based in Henderson, Nevada.
About Selective Insurance Group
Selective Insurance Group, Inc., together with its subsidiaries, provides insurance products and services in the United States. The company operates through four segments: Standard Commercial Lines, Standard Personal Lines, E&S Lines, and Investments. It offers casualty insurance products that covers the financial consequences of employee injuries in the course of employment and bodily injury and/or property damage to a third party; property insurance products, which covers the accidental loss of an insured's real property, personal property, and/or earnings due to the property's loss; and flood insurance products. The company also invests in fixed income investments and commercial mortgage loans, as well as equity securities, short-term investments, and alternative investments, and other investments. It offers its insurance products and services to businesses, non-profit organizations, local government agencies, and individuals through independent retail agents and wholesale general agents. The company was founded in 1926 and is headquartered in Branchville, New Jersey.
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