AmTrust Financial Services (NASDAQ:AFSI) and First Acceptance (NYSE:FAC) are both finance companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.
AmTrust Financial Services pays an annual dividend of $0.34 per share and has a dividend yield of 2.3%. First Acceptance does not pay a dividend. AmTrust Financial Services has increased its dividend for 12 consecutive years.
This table compares AmTrust Financial Services and First Acceptance’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|AmTrust Financial Services||3.98%||-17.61%||-1.84%|
This is a breakdown of current ratings and target prices for AmTrust Financial Services and First Acceptance, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|AmTrust Financial Services||0||1||0||0||2.00|
AmTrust Financial Services currently has a consensus target price of $14.75, indicating a potential upside of 0.00%. Given AmTrust Financial Services’ higher possible upside, equities research analysts plainly believe AmTrust Financial Services is more favorable than First Acceptance.
Insider & Institutional Ownership
38.0% of AmTrust Financial Services shares are owned by institutional investors. Comparatively, 19.7% of First Acceptance shares are owned by institutional investors. 50.8% of AmTrust Financial Services shares are owned by insiders. Comparatively, 9.5% of First Acceptance shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Earnings and Valuation
This table compares AmTrust Financial Services and First Acceptance’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|AmTrust Financial Services||$5.96 billion||0.49||-$348.88 million||N/A||N/A|
First Acceptance has lower revenue, but higher earnings than AmTrust Financial Services.
AmTrust Financial Services beats First Acceptance on 7 of the 9 factors compared between the two stocks.
About AmTrust Financial Services
AmTrust Financial Services, Inc. provides property and casualty insurance in the United States and internationally. The company operates in three segments: Small Commercial Business, Specialty Risk and Extended Warranty, and Specialty Program. The Small Commercial Business segment offers workers' compensation insurance products; and commercial package, and other property and casualty insurance products, such as commercial property, general liability, inland marine, employment practices liability, commercial automobile, and umbrella coverage to small businesses. The Specialty Risk and Extended Warranty segment provides custom designed coverages, such as accidental damage plans, mechanical breakdown protection, and payment protection plans in connection with the sale of consumer and commercial goods; and coverage for niche property, casualty, and specialty liability risks comprising general liability, employers' liability, and professional and medical liability. The Specialty Program segment offers workers' compensation, general liability, commercial auto liability, property coverage, excess and surplus lines programs, and other specialty commercial property and casualty insurance products to small and middle market companies. The company also provides reinsurance services primarily for personal and commercial automotive business. It distributes its policies third-party brokers, agents, retailers, or administrators. AmTrust Financial Services, Inc. was founded in 1998 and is based in New York, New York.
About First Acceptance
First Acceptance Corporation, through its subsidiaries, operates as a retailer, servicer, and underwriter of non-standard personal automobile insurance and other ancillary products in the United States. The company operates through two segments, Insurance, and Real Estate and Corporate. It issues automobile insurance policies to individuals who are categorized as non-standard based primarily on their inability or unwillingness to obtain insurance coverage from standard carriers due to various factors, including their payment history or need for monthly payment plans, failure to maintain continuous insurance coverage, or driving record. The company also offers optional products that provide ancillary reimbursements and benefits in the event of an automobile accident, such as products that offer reimbursements for medical expenses and hospital stays as a result of injuries sustained in an automobile accident, automobile towing and rental, and ambulance services; and underwrites a tenant homeowner policy that provides contents and liability coverage to customers who are renters. In addition, it engages in the disposition of real estate held for sale. The company markets its products under the Acceptance Insurance brand name. It primarily distributes its products through its retail locations, as well as through call center and Internet. As of December 31, 2016, the company leased and operated 355 retail locations a call center. First Acceptance Corporation was founded in 1969 and is based in Nashville, Tennessee.
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