Erie Indemnity (NASDAQ: ERIE) and White Mountains Insurance Group (NYSE:WTM) are both mid-cap property & casualty insurance – nec companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.
This table compares Erie Indemnity and White Mountains Insurance Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|White Mountains Insurance Group||69.96%||1.32%||0.82%|
This is a summary of recent recommendations for Erie Indemnity and White Mountains Insurance Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|White Mountains Insurance Group||0||0||0||0||N/A|
Risk and Volatility
Erie Indemnity has a beta of 0.45, meaning that its share price is 55% less volatile than the S&P 500. Comparatively, White Mountains Insurance Group has a beta of 0.53, meaning that its share price is 47% less volatile than the S&P 500.
Valuation and Earnings
This table compares Erie Indemnity and White Mountains Insurance Group’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Erie Indemnity||$1.60 billion||3.55||$210.36 million||$4.02||30.53|
|White Mountains Insurance Group||$1.36 billion||2.40||$412.50 million||$1.81||481.20|
White Mountains Insurance Group has higher revenue, but lower earnings than Erie Indemnity. Erie Indemnity is trading at a lower price-to-earnings ratio than White Mountains Insurance Group, indicating that it is currently the more affordable of the two stocks.
Erie Indemnity pays an annual dividend of $3.13 per share and has a dividend yield of 2.5%. White Mountains Insurance Group pays an annual dividend of $1.00 per share and has a dividend yield of 0.1%. Erie Indemnity pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. White Mountains Insurance Group pays out 55.2% of its earnings in the form of a dividend. Erie Indemnity has increased its dividend for 21 consecutive years. Erie Indemnity is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider and Institutional Ownership
30.8% of Erie Indemnity shares are owned by institutional investors. 46.8% of Erie Indemnity shares are owned by company insiders. Comparatively, 5.1% of White Mountains Insurance Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Erie Indemnity beats White Mountains Insurance Group on 9 of the 14 factors compared between the two stocks.
Erie Indemnity Company Profile
Erie Indemnity Company is a management company. The Company serves as the attorney-in-fact for the subscribers (policyholders) at the Erie Insurance Exchange (Exchange). The Exchange is a reciprocal insurer that writes property and casualty insurance. The Company’s function is to perform certain services for the Exchange relating to the sales, underwriting and issuance of policies on behalf of the Exchange. The sales related services the Company provides include agent compensation, and certain sales and advertising support services. Agent compensation includes scheduled commissions to agents based upon premiums written, as well as additional commissions and bonuses to agents. The underwriting services the Company provides include underwriting and policy processing expenses. It provides information technology services that supports various functions. The remaining services the Company provides include customer service and administrative costs.
White Mountains Insurance Group Company Profile
White Mountains Insurance Group, Ltd. is a holding company. The Company’s principal businesses are conducted through its insurance subsidiaries and other affiliates. Its segments include HG Global/BAM and Other Operations. The HG Global/BAM segment consists of the operations of HG Global Ltd. (HG Global) and Build America Mutual Assurance Company (BAM). The Other Operations segment consists of the Company and its intermediate holding companies, its investment management subsidiary, White Mountains Advisors LLC, and certain consolidated and unconsolidated private capital investments.
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