Critical Review: W.R. Berkley Corporation (WRB) versus EMC Insurance Group (EMCI)
W.R. Berkley Corporation (NYSE: WRB) and EMC Insurance Group (NASDAQ:EMCI) are both finance companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, profitabiliy, earnings, institutional ownership, risk, dividends and valuation.
Valuation & Earnings
This table compares W.R. Berkley Corporation and EMC Insurance Group’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|W.R. Berkley Corporation||$7.72 billion||1.08||$1.12 billion||$4.73||14.56|
|EMC Insurance Group||$645.64 million||0.90||$38.69 million||$1.82||15.04|
W.R. Berkley Corporation has higher revenue and earnings than EMC Insurance Group. W.R. Berkley Corporation is trading at a lower price-to-earnings ratio than EMC Insurance Group, indicating that it is currently the more affordable of the two stocks.
This is a summary of current ratings for W.R. Berkley Corporation and EMC Insurance Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|W.R. Berkley Corporation||1||7||1||0||2.00|
|EMC Insurance Group||0||0||0||0||N/A|
W.R. Berkley Corporation currently has a consensus price target of $60.00, indicating a potential downside of 12.87%. Given W.R. Berkley Corporation’s higher possible upside, equities analysts plainly believe W.R. Berkley Corporation is more favorable than EMC Insurance Group.
W.R. Berkley Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. EMC Insurance Group pays an annual dividend of $0.84 per share and has a dividend yield of 3.1%. W.R. Berkley Corporation pays out 11.8% of its earnings in the form of a dividend. EMC Insurance Group pays out 46.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. EMC Insurance Group has raised its dividend for 7 consecutive years. EMC Insurance Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Insider & Institutional Ownership
72.2% of W.R. Berkley Corporation shares are held by institutional investors. Comparatively, 28.3% of EMC Insurance Group shares are held by institutional investors. 22.6% of W.R. Berkley Corporation shares are held by insiders. Comparatively, 4.5% of EMC Insurance Group shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares W.R. Berkley Corporation and EMC Insurance Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|W.R. Berkley Corporation||7.85%||8.16%||1.77%|
|EMC Insurance Group||5.98%||6.00%||2.09%|
Volatility and Risk
W.R. Berkley Corporation has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500. Comparatively, EMC Insurance Group has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500.
W.R. Berkley Corporation beats EMC Insurance Group on 11 of the 16 factors compared between the two stocks.
W.R. Berkley Corporation Company Profile
W. R. Berkley Corporation is an insurance holding company. It operates through two segments: Insurance and Reinsurance-Global. The Insurance segment consists of its commercial insurance business operations, comprising excess and surplus lines, and admitted lines, throughout the United States, as well as its insurance business operations in the United Kingdom, Continental Europe, South America, Canada, Mexico, Scandinavia, Asia and Australia. Its Insurance segment comprises business units, such as Acadia Insurance, American Mining Insurance Group, Berkley Accident and Health, Berkley Agribusiness Risk Specialists, Berkley Aviation and Berkley Canada. Reinsurance consists of its reinsurance business on a facultative and treaty basis, in the United States, the United Kingdom, Continental Europe, Australia, the Asia-Pacific region and South Africa. Its Reinsurance segment comprises business units, such as Berkley Re America, Berkley Re Asia Pacific, Berkley Re Direct and Berkley Re UK.
EMC Insurance Group Company Profile
EMC Insurance Group Inc. is an insurance holding company. The Company operates through two segments: Property and Casualty Insurance and Reinsurance segment. It conducts its property and casualty insurance operations through its subsidiaries, including EMCASCO Insurance Company, Illinois EMCASCO Insurance Company and Dakota Fire Insurance Company, and its reinsurance operations through its subsidiary, EMC Reinsurance Company. The Company focuses on the sale of commercial lines of property and casualty insurance to small and medium-sized businesses. The Company offered its insurance products in 41 states, as of December 31, 2016. The Company is owned by Employers Mutual Casualty Company (Employers Mutual), a multiple-line property and casualty insurance company. The Company’s insurance agency, EMC Underwriters, LLC (EMC Underwriters), specializes in marketing excess and surplus lines of insurance.
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