Critical Contrast: OneBeacon Insurance Group (OB) & Fidelity National Financial (FNF)
OneBeacon Insurance Group (NYSE: OB) and Fidelity National Financial (NYSE:FNF) are both finance companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitabiliy, earnings, analyst recommendations, institutional ownership, risk and valuation.
OneBeacon Insurance Group pays an annual dividend of $0.84 per share and has a dividend yield of 4.6%. Fidelity National Financial pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. OneBeacon Insurance Group pays out 84.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Fidelity National Financial pays out 42.9% of its earnings in the form of a dividend. Fidelity National Financial has raised its dividend for 5 consecutive years.
This is a summary of recent recommendations for OneBeacon Insurance Group and Fidelity National Financial, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|OneBeacon Insurance Group||0||0||0||0||N/A|
|Fidelity National Financial||0||1||3||0||2.75|
Fidelity National Financial has a consensus target price of $43.50, suggesting a potential downside of 0.89%. Given Fidelity National Financial’s higher possible upside, analysts plainly believe Fidelity National Financial is more favorable than OneBeacon Insurance Group.
This table compares OneBeacon Insurance Group and Fidelity National Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|OneBeacon Insurance Group||7.96%||6.76%||1.94%|
|Fidelity National Financial||7.34%||10.51%||4.98%|
Volatility and Risk
OneBeacon Insurance Group has a beta of 0.56, indicating that its share price is 44% less volatile than the S&P 500. Comparatively, Fidelity National Financial has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500.
Valuation & Earnings
This table compares OneBeacon Insurance Group and Fidelity National Financial’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|OneBeacon Insurance Group||$1.18 billion||1.46||$93.79 million||$0.99||18.37|
|Fidelity National Financial||$9.74 billion||1.23||$1.60 billion||$2.33||18.84|
Fidelity National Financial has higher revenue and earnings than OneBeacon Insurance Group. OneBeacon Insurance Group is trading at a lower price-to-earnings ratio than Fidelity National Financial, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
18.5% of OneBeacon Insurance Group shares are owned by institutional investors. Comparatively, 84.2% of Fidelity National Financial shares are owned by institutional investors. 76.8% of OneBeacon Insurance Group shares are owned by insiders. Comparatively, 5.0% of Fidelity National Financial shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Fidelity National Financial beats OneBeacon Insurance Group on 12 of the 16 factors compared between the two stocks.
OneBeacon Insurance Group Company Profile
OneBeacon Insurance Group, Ltd. (OneBeacon) is a specialty property and casualty insurance writer that offers a range of insurance products in the United States. The Company’s segments include Specialty Products, Specialty Industries, and Investing, Financing and Corporate. As of December 31, 2016, the Specialty Products segment consisted of 10 underwriting operating segments representing an aggregation based on those that offer products, coverages and services to customers across the United States. As of December 31, 2016, the Specialty Industries segment consisted of six underwriting operating segments representing an aggregation based on those that focus on solving the needs of a particular customer or industry group. The Investing, Financing and Corporate segment includes the investing and financing activities for OneBeacon on a consolidated basis, and certain other activities conducted through the Company and its intermediate subsidiaries.
Fidelity National Financial Company Profile
Fidelity National Financial, Inc. (FNF) is a holding company. FNF, through its subsidiaries, provides title insurance, mortgage services and diversified services. FNF operates in four segments: Fidelity National Title Group, Remy, Restaurant Group and Corporate and Other. The Fidelity National Title Group segment consists of the operations of FNF’s title insurance underwriters and related businesses. The Remy segment is a designer, manufacturer, remanufacturer, marketer and distributor of aftermarket and original equipment electrical components for automobiles, light trucks, heavy-duty trucks and other vehicles. The Restaurant Group segment consists of the operations of ABRH. The corporate and other segment consists of the operations of the holding company. In January 2014, FNF announced the closing of its acquisition of Lender Processing Services, Inc. (LPS). On January 2, 2014, FNF formed a wholly owned subsidiary Black Knight Financial Services, Inc.
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