RLI (NYSE: RLI) and Hanover Insurance Group (NYSE:THG) are both mid-cap financials companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, institutional ownership, profitability, dividends, analyst recommendations and valuation.
Valuation & Earnings
This table compares RLI 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|
|RLI||$816.33 million||3.15||$114.92 million||$1.80||32.41|
|Hanover Insurance Group||$4.95 billion||0.92||$155.10 million||$2.82||37.83|
Volatility and Risk
RLI has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500. Comparatively, Hanover Insurance Group has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.
This is a summary of recent ratings and target prices for RLI and Hanover Insurance Group, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hanover Insurance Group||0||1||0||0||2.00|
RLI currently has a consensus target price of $43.00, suggesting a potential downside of 26.28%. Hanover Insurance Group has a consensus target price of $91.00, suggesting a potential downside of 14.70%. Given Hanover Insurance Group’s stronger consensus rating and higher possible upside, analysts clearly believe Hanover Insurance Group is more favorable than RLI.
This table compares RLI 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||2.37%||3.35%||0.67%|
RLI pays an annual dividend of $0.84 per share and has a dividend yield of 1.4%. Hanover Insurance Group pays an annual dividend of $2.16 per share and has a dividend yield of 2.0%. RLI pays out 46.7% of its earnings in the form of a dividend. Hanover Insurance Group pays out 76.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. RLI has increased its dividend for 40 consecutive years and Hanover Insurance Group has increased its dividend for 5 consecutive years.
Insider & Institutional Ownership
83.6% of RLI shares are held by institutional investors. Comparatively, 83.8% of Hanover Insurance Group shares are held by institutional investors. 6.1% of RLI shares are held by company insiders. Comparatively, 1.1% of Hanover Insurance Group shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
RLI Company Profile
RLI Corp. is a specialty insurance company. The Company underwrites selected property and casualty insurance through subsidiaries, as well as offers insurance coverages in both the specialty admitted, and excess and surplus markets. It operates through Casualty, Property and Surety segments. Its Casualty segment consists of commercial and personal umbrella, general liability, commercial transportation, professional services, small commercial, executive products, medical professional liability and other casualty businesses. Its property segment consists of commercial property, marine, specialty personal, property reinsurance and crop reinsurance businesses. Its surety segment consists of miscellaneous, commercial, contract and energy businesses. The Company conducts its operations principally through three insurance companies: RLI Insurance Company (RLI Ins.), Mt. Hawley Insurance Company (Mt. Hawley) and Contractors Bonding and Insurance Company (CBIC).
Hanover Insurance Group Company Profile
The Hanover Insurance Group, Inc. is a holding company. The Company is engaged in providing property and casualty insurance products and services. The Company has four segments: Commercial Lines, Personal Lines, Chaucer and Other. It markets its domestic products and services through independent agents and brokers in the United States, and conducts business internationally through a subsidiary, Chaucer Holdings Limited, which operates through the Society and Corporation of Lloyd’s (Lloyd’s). Its Commercial Lines product suite provides agents and customers with products designed for small, middle and specialized markets. Its Personal Lines coverages include other personal lines, which consist of umbrella and fire, among others. The Chaucer segment consists of international business written through Lloyd’s, including marine and aviation, and property. The Other segment consists of Opus Investment Management, Inc. (Opus), which provides investment advisory services to affiliates.
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