Head-To-Head Review: Employers Holdings (EIG) versus Berkshire Hathaway (BRK.A)
Employers Holdings (NYSE: EIG) and Berkshire Hathaway (NYSE:BRK.A) are both financials companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, risk, dividends, profitabiliy, earnings, valuation and institutional ownership.
Volatility and Risk
Employers Holdings has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, Berkshire Hathaway has a beta of 0.8, indicating that its share price is 20% less volatile than the S&P 500.
This is a summary of recent ratings for Employers Holdings and Berkshire Hathaway, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Berkshire Hathaway has a consensus target price of $137,583.00, suggesting a potential upside of Infinity. Given Berkshire Hathaway’s stronger consensus rating and higher probable upside, analysts plainly believe Berkshire Hathaway is more favorable than Employers Holdings.
Valuation and Earnings
This table compares Employers Holdings and Berkshire Hathaway’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Employers Holdings||$784.10 million||1.73||$152.50 million||$2.96||14.17|
Employers Holdings has higher revenue and earnings than Berkshire Hathaway. Berkshire Hathaway is trading at a lower price-to-earnings ratio than Employers Holdings, indicating that it is currently the more affordable of the two stocks.
Employers Holdings pays an annual dividend of $0.36 per share and has a dividend yield of 0.9%. Berkshire Hathaway does not pay a dividend. Employers Holdings pays out 12.2% of its earnings in the form of a dividend.
Insider and Institutional Ownership
78.5% of Employers Holdings shares are held by institutional investors. Comparatively, 13.4% of Berkshire Hathaway shares are held by institutional investors. 4.0% of Employers Holdings shares are held by company insiders. Comparatively, 6.1% of Berkshire Hathaway shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This table compares Employers Holdings and Berkshire Hathaway’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Berkshire Hathaway beats Employers Holdings on 8 of the 14 factors compared between the two stocks.
Employers Holdings Company Profile
Employers Holdings, Inc. is a holding company. Through its insurance subsidiaries, the Company provides workers’ compensation insurance coverage to select, small businesses in low to medium hazard industries. It provides workers’ compensation insurance under a statutory system wherein employers are required to provide coverage for their employees’ medical, disability, vocational rehabilitation, and/or death benefit costs for work-related injuries or illnesses. As of December 31, 2016 the Company provided workers’ compensation insurance in 36 states and the District of Columbia, with a concentration in California. Its insurance subsidiaries include Employers Insurance Company of Nevada (EICN), Employers Compensation Insurance Company (ECIC), Employers Preferred Insurance Company (EPIC) and Employers Assurance Company (EAC). The Company’s insurance products are jointly offered and marketed with and through its partners and alliances.
Berkshire Hathaway Company Profile
Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in various business activities. Its segments include Insurance, such as GEICO, Berkshire Hathaway Primary Group, General Re Corporation and Berkshire Hathaway Reinsurance Group; Burlington Northern Santa Fe, LLC, which is engaged in the operation of the railroad system; Berkshire Hathaway Energy, which includes regulated electric and gas utility; Manufacturing, which includes manufacturers of various products, including industrial, consumer and building products; McLane Company, which is engaged in the wholesale distribution of groceries and non-food items; Service and retailing, which includes providers of various services, including fractional aircraft ownership programs, aviation pilot training and various retailing businesses, and Finance and financial products, which includes manufactured housing and related consumer financing, transportation equipment, manufacturing and leasing, and furniture leasing.
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