Argo Group International Holdings (NASDAQ: AGII) and United Insurance Holdings Corp. (NASDAQ:UIHC) are both small-cap finance companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitabiliy, earnings, institutional ownership, risk, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Argo Group International Holdings and United Insurance Holdings Corp., as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Argo Group International Holdings 1 1 0 0 1.50
United Insurance Holdings Corp. 1 0 1 1 2.67

Argo Group International Holdings presently has a consensus price target of $62.00, suggesting a potential upside of 2.73%. United Insurance Holdings Corp. has a consensus price target of $15.25, suggesting a potential downside of 4.75%. Given Argo Group International Holdings’ higher probable upside, research analysts clearly believe Argo Group International Holdings is more favorable than United Insurance Holdings Corp..

Dividends

Argo Group International Holdings pays an annual dividend of $1.08 per share and has a dividend yield of 1.8%. United Insurance Holdings Corp. pays an annual dividend of $0.24 per share and has a dividend yield of 1.5%. Argo Group International Holdings pays out 21.3% of its earnings in the form of a dividend. United Insurance Holdings Corp. pays out 80.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Argo Group International Holdings is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

88.3% of Argo Group International Holdings shares are held by institutional investors. Comparatively, 28.5% of United Insurance Holdings Corp. shares are held by institutional investors. 5.8% of Argo Group International Holdings shares are held by company insiders. Comparatively, 22.6% of United Insurance Holdings Corp. shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Argo Group International Holdings and United Insurance Holdings Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Argo Group International Holdings 9.53% 6.07% 1.48%
United Insurance Holdings Corp. 1.32% 2.64% 0.68%

Valuation & Earnings

This table compares Argo Group International Holdings and United Insurance Holdings Corp.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Argo Group International Holdings $1.62 billion 1.12 $231.40 million $5.06 11.93
United Insurance Holdings Corp. $502.19 million 0.69 $22.70 million $0.30 53.37

Argo Group International Holdings has higher revenue and earnings than United Insurance Holdings Corp.. Argo Group International Holdings is trading at a lower price-to-earnings ratio than United Insurance Holdings Corp., indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Argo Group International Holdings has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500. Comparatively, United Insurance Holdings Corp. has a beta of 1.61, suggesting that its stock price is 61% more volatile than the S&P 500.

Summary

Argo Group International Holdings beats United Insurance Holdings Corp. on 11 of the 17 factors compared between the two stocks.

Argo Group International Holdings Company Profile

Argo Group International Holdings, Ltd. is an underwriter of specialty insurance and reinsurance products in the property and casualty market. The Company operates through four segments: Excess and Surplus Lines, Commercial Specialty, International Specialty and Syndicate 1200. Excess and Surplus Lines segment carriers focus on risks that the standard (admitted) market is unwilling or unable to underwrite. The Excess and Surplus Lines segment consists of two operating platforms: Colony Specialty and Argo Pro. Commercial Specialty segment provides property, casualty and surety coverages designed to meet the insurance needs of businesses within certain markets. International Specialty segment underwrites insurance and reinsurance risks. It operate as Argo Re, the Casualty and Professional Lines unit of Argo Insurance in Bermuda, and Argo Seguros Brazil, S.A. in Brazil. The Syndicate 1200 segment underwrites around the world property, specialty and non-United States liability insurance.

United Insurance Holdings Corp. Company Profile

United Insurance Holdings Corp. is a property and casualty insurance holding company that sources, writes and services residential property and casualty insurance policies using a network of agents and a group of insurance subsidiaries. The Company’s insurance subsidiary is United Property & Casualty Insurance Company. Its other subsidiaries include United Insurance Management, L.C., the managing general agent that manages substantially all aspects of United Property & Casualty Insurance Company’s business; Skyway Claims Services, LLC, which provides services to its insurance affiliate; UPC Re, which provides a portion of the reinsurance protection purchased by its insurance affiliate. The Company’s principal product is homeowners’ insurance, which it offers in Connecticut, Florida, Georgia, Hawaii, Louisiana, Massachusetts, New Jersey, North Carolina, Rhode Island, South Carolina and Texas.

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