Everest Re Group (NYSE: RE) and Aspen Insurance Holdings Limited (NYSE:AHL) are both mid-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitabiliy, dividends, analyst recommendations, risk and institutional ownership.

Dividends

Everest Re Group pays an annual dividend of $5.00 per share and has a dividend yield of 1.9%. Aspen Insurance Holdings Limited pays an annual dividend of $0.96 per share and has a dividend yield of 1.9%. Everest Re Group pays out 18.6% of its earnings in the form of a dividend. Aspen Insurance Holdings Limited pays out 42.9% 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. Everest Re Group has raised its dividend for 4 consecutive years and Aspen Insurance Holdings Limited has raised its dividend for 5 consecutive years. Aspen Insurance Holdings Limited is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Everest Re Group and Aspen Insurance Holdings Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Everest Re Group 18.49% 12.70% 4.77%
Aspen Insurance Holdings Limited 6.91% 3.97% 1.22%

Analyst Ratings

This is a breakdown of current recommendations for Everest Re Group and Aspen Insurance Holdings Limited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Everest Re Group 2 4 1 0 1.86
Aspen Insurance Holdings Limited 0 1 0 0 2.00

Everest Re Group currently has a consensus target price of $241.00, indicating a potential downside of 10.42%. Aspen Insurance Holdings Limited has a consensus target price of $55.00, indicating a potential upside of 7.63%. Given Aspen Insurance Holdings Limited’s stronger consensus rating and higher probable upside, analysts clearly believe Aspen Insurance Holdings Limited is more favorable than Everest Re Group.

Institutional and Insider Ownership

92.3% of Everest Re Group shares are owned by institutional investors. Comparatively, 91.8% of Aspen Insurance Holdings Limited shares are owned by institutional investors. 1.3% of Everest Re Group shares are owned by company insiders. Comparatively, 1.3% of Aspen Insurance Holdings Limited shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Everest Re Group has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, Aspen Insurance Holdings Limited has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500.

Valuation & Earnings

This table compares Everest Re Group and Aspen Insurance Holdings Limited’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Everest Re Group $6.04 billion 1.83 $1.10 billion $26.88 10.01
Aspen Insurance Holdings Limited $2.79 billion 1.10 $293.20 million $2.24 22.81

Everest Re Group has higher revenue and earnings than Aspen Insurance Holdings Limited. Everest Re Group is trading at a lower price-to-earnings ratio than Aspen Insurance Holdings Limited, indicating that it is currently the more affordable of the two stocks.

Summary

Everest Re Group beats Aspen Insurance Holdings Limited on 10 of the 17 factors compared between the two stocks.

Everest Re Group Company Profile

Everest Re Group, Ltd., through its subsidiaries, is engaged in the underwriting of reinsurance and insurance in the United States, Bermuda and international markets. The Company operates in segments: U.S. Reinsurance, International, Bermuda and Insurance segment. The Company underwrites reinsurance both through brokers and directly with ceding companies. The Company underwrites insurance principally through general agent relationships, brokers and surplus lines brokers. The Company offers treaty and facultative reinsurance, and admitted and non-admitted insurance. Its products include the range of property and casualty reinsurance, and insurance coverage’s, including marine, aviation, surety, errors and omissions liability (E&O), directors’ and officers’ liability (D&O), medical malpractice, other specialty lines, accident and health (A&H) and workers’ compensation. Its subsidiaries include Everest Reinsurance (Bermuda), Ltd. (Bermuda Re) and Everest International Reinsurance, Ltd.

Aspen Insurance Holdings Limited Company Profile

Aspen Insurance Holdings Limited is a holding company. The Company underwrites specialty insurance and reinsurance on a global basis. It manages its business as two business segments: Aspen Insurance and Aspen Reinsurance (Aspen Re). The reinsurance segment consists of property catastrophe reinsurance (including the business written through Aspen Capital Markets), other property reinsurance (risk excess, pro rata and facultative), casualty reinsurance (U.S. treaty, international treaty and global facultative) and specialty reinsurance (credit and surety, agriculture insurance and reinsurance, marine, aviation, terrorism, engineering and other specialty lines). The insurance segment consists of property and casualty insurance; marine, aviation and energy insurance, and financial and professional lines insurance. Aspen Re participates in alternative reinsurance market through Aspen Capital Markets, which is part of property catastrophe reinsurance line of business.

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