Infinity Property and Casualty Corporation (NASDAQ: IPCC) and Safety Insurance Group (NASDAQ:SAFT) are both small-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, earnings, analyst recommendations, profitabiliy and risk.

Profitability

This table compares Infinity Property and Casualty Corporation and Safety Insurance Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Infinity Property and Casualty Corporation 2.97% 6.21% 1.80%
Safety Insurance Group 7.75% 9.42% 3.61%

Dividends

Infinity Property and Casualty Corporation pays an annual dividend of $2.32 per share and has a dividend yield of 2.4%. Safety Insurance Group pays an annual dividend of $2.80 per share and has a dividend yield of 4.0%. Infinity Property and Casualty Corporation pays out 55.9% of its earnings in the form of a dividend. Safety Insurance Group pays out 66.4% 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. Safety Insurance Group has increased its dividend for 9 consecutive years. Safety Insurance Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of recent ratings for Infinity Property and Casualty Corporation and Safety Insurance Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Infinity Property and Casualty Corporation 0 1 1 0 2.50
Safety Insurance Group 0 1 0 0 2.00

Infinity Property and Casualty Corporation presently has a consensus target price of $99.50, suggesting a potential upside of 2.90%. Safety Insurance Group has a consensus target price of $60.00, suggesting a potential downside of 13.23%. Given Infinity Property and Casualty Corporation’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Infinity Property and Casualty Corporation is more favorable than Safety Insurance Group.

Risk & Volatility

Infinity Property and Casualty Corporation has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500. Comparatively, Safety Insurance Group has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.

Institutional & Insider Ownership

96.3% of Infinity Property and Casualty Corporation shares are held by institutional investors. Comparatively, 79.6% of Safety Insurance Group shares are held by institutional investors. 3.3% of Infinity Property and Casualty Corporation shares are held by insiders. Comparatively, 6.2% of Safety Insurance Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Infinity Property and Casualty Corporation and Safety Insurance Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Infinity Property and Casualty Corporation $1.55 billion 0.69 $116.87 million $4.15 23.30
Safety Insurance Group $824.76 million 1.28 $107.60 million $4.22 16.39

Infinity Property and Casualty Corporation has higher revenue and earnings than Safety Insurance Group. Safety Insurance Group is trading at a lower price-to-earnings ratio than Infinity Property and Casualty Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Infinity Property and Casualty Corporation beats Safety Insurance Group on 9 of the 17 factors compared between the two stocks.

Infinity Property and Casualty Corporation Company Profile

Infinity Property and Casualty Corporation is a holding company. The Company’s segments include Personal Auto, Commercial Vehicle and Classic Collector (its segments are Personal Auto and Commercial Vehicle). The Company writes personal automobile insurance with a concentration on nonstandard automobile insurance, commercial vehicle insurance and classic collector automobile insurance. The Company offers personal and commercial automobile insurance in states, including Arizona, California, Florida and Texas. Personal Automobile is its insurance product, which provides coverage to individuals for liability to others for bodily injury and property damage and for physical damage to an insured’s own vehicle from collision and various other perils. Commercial Vehicle provides coverage to businesses for liability to others for bodily injury and property damage and for physical damage to vehicles from collision. Classic Collector provides protection for classic collectible automobiles.

Safety Insurance Group Company Profile

Safety Insurance Group, Inc. is a provider of private passenger automobile insurance. The Company offers a portfolio of property and casualty insurance products. The Company is engaged in property and casualty insurance operations. The Company’s product line includes private passenger automobile, commercial automobile, homeowners, business owners’ policies, personal umbrella, dwelling fire, commercial umbrella, inland marine and watercraft. The Company operates through its insurance company subsidiaries, Safety Insurance Company, Safety Indemnity Insurance Company, and Safety Property and Casualty Insurance Company. Private passenger automobile policies provide coverage for bodily injury and property damage to others, no-fault personal injury coverage for the insured/insured’s car occupants, and physical damage coverage for an insured’s own vehicle for collision or other perils. Commercial automobile policies provide coverage for bodily injury and property damage to others.

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