Analyzing United Fire Group (UFCS) and Selective Insurance Group (SIGI)

United Fire Group (NASDAQ: UFCS) and Selective Insurance Group (NASDAQ:SIGI) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Dividends

United Fire Group pays an annual dividend of $1.12 per share and has a dividend yield of 2.4%. Selective Insurance Group pays an annual dividend of $0.72 per share and has a dividend yield of 1.2%. United Fire Group pays out 177.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Selective Insurance Group pays out 23.9% of its earnings in the form of a dividend.

Risk & Volatility

United Fire Group has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500. Comparatively, Selective Insurance Group has a beta of 1.45, suggesting that its stock price is 45% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for United Fire Group and Selective Insurance Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United Fire Group 0 2 1 0 2.33
Selective Insurance Group 0 4 0 0 2.00

United Fire Group currently has a consensus price target of $46.33, suggesting a potential downside of 2.66%. Selective Insurance Group has a consensus price target of $50.91, suggesting a potential downside of 14.50%. Given United Fire Group’s stronger consensus rating and higher probable upside, analysts plainly believe United Fire Group is more favorable than Selective Insurance Group.

Earnings & Valuation

This table compares United Fire Group and Selective Insurance Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United Fire Group $1.14 billion 1.04 $49.90 million $0.63 75.56
Selective Insurance Group $2.28 billion 1.52 $158.49 million $3.01 19.78

Selective Insurance Group has higher revenue and earnings than United Fire Group. Selective Insurance Group is trading at a lower price-to-earnings ratio than United Fire Group, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

58.4% of United Fire Group shares are held by institutional investors. Comparatively, 77.8% of Selective Insurance Group shares are held by institutional investors. 5.8% of United Fire Group shares are held by company insiders. Comparatively, 3.0% of Selective Insurance Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares United Fire Group and Selective Insurance Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United Fire Group 1.49% 1.32% 0.30%
Selective Insurance Group 7.36% 11.00% 2.37%

Summary

Selective Insurance Group beats United Fire Group on 10 of the 16 factors compared between the two stocks.

About United Fire Group

United Fire Group, Inc., formerly United Fire & Casualty Company, is engaged in the business of writing property and casualty insurance and life insurance and selling annuities. The Company operates in two segments: property and casualty insurance, and life insurance. The Company’s property and casualty insurance segment consists of commercial lines insurance, including surety bonds, personal lines insurance and assumed insurance. Its life insurance segment consists of deferred and immediate annuities, universal life insurance products and traditional life insurance products. Its life insurance segment consists solely of the operations of United Life Insurance Company. On February 1, 2012, the Company completed a holding company reorganization of United Fire Group, Inc., United Fire & Casualty Company and UFC MergeCo, Inc. On March 28, 2011, the Company acquired Mercer Insurance Group, Inc. (Mercer Insurance Group).

About Selective Insurance Group

Selective Insurance Group, Inc. is a holding company. As of December 31, 2016, the Company had 10 insurance subsidiaries, nine of which were licensed by various state departments of insurance to write specific lines of property and casualty insurance business. The remaining subsidiary is authorized by various state insurance departments to write property and casualty insurance in the excess and surplus lines (E&S) market. Its segments include Standard Commercial Lines, which consists of insurance products and services provided in the standard marketplace; Standard Personal Lines, which consists of insurance products and services, including flood insurance coverage that it writes through the National Flood Insurance Program (NFIP); E&S Lines, which consists of insurance products and services provided to customers not obtaining coverage in the standard marketplace, and investment segment invests insurance premiums, as well as amounts generated through its capital management strategies.

Receive News & Ratings for United Fire Group Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for United Fire Group and related companies with MarketBeat.com's FREE daily email newsletter.

Latest News

Leave a Reply