Everest Re Group (NYSE: RE) and Blue Capital Reinsurance Holdings (NYSE:BCRH) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitabiliy, analyst recommendations, institutional ownership and dividends.

Profitability

This table compares Everest Re Group and Blue Capital Reinsurance Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Everest Re Group 19.65% 13.60% 5.12%
Blue Capital Reinsurance Holdings 38.93% 8.84% 7.76%

Risk and Volatility

Everest Re Group has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, Blue Capital Reinsurance Holdings has a beta of 0.1, meaning that its share price is 90% less volatile than the S&P 500.

Institutional & Insider Ownership

92.7% of Everest Re Group shares are held by institutional investors. Comparatively, 40.2% of Blue Capital Reinsurance Holdings shares are held by institutional investors. 1.3% of Everest Re Group shares are held by insiders. Comparatively, 0.1% of Blue Capital Reinsurance Holdings shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Everest Re Group and Blue Capital Reinsurance Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Everest Re Group 2 4 1 0 1.86
Blue Capital Reinsurance Holdings 0 1 0 0 2.00

Everest Re Group presently has a consensus price target of $241.00, suggesting a potential downside of 9.26%. Given Everest Re Group’s higher probable upside, equities analysts clearly believe Everest Re Group is more favorable than Blue Capital Reinsurance Holdings.

Valuation & Earnings

This table compares Everest Re Group and Blue Capital Reinsurance Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Everest Re Group $6.14 billion 1.78 $1.20 billion $29.16 9.11
Blue Capital Reinsurance Holdings $42.10 million 4.15 $16.02 million $1.83 10.90

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

Dividends

Everest Re Group pays an annual dividend of $5.00 per share and has a dividend yield of 1.9%. Blue Capital Reinsurance Holdings pays an annual dividend of $1.20 per share and has a dividend yield of 6.0%. Everest Re Group pays out 17.1% of its earnings in the form of a dividend. Blue Capital Reinsurance Holdings pays out 65.6% 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. Blue Capital Reinsurance Holdings has increased its dividend for 4 consecutive years. Blue Capital Reinsurance Holdings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Everest Re Group beats Blue Capital Reinsurance Holdings 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.

Blue Capital Reinsurance Holdings Company Profile

Blue Capital Reinsurance Holdings Ltd. provides collateralized reinsurance in the property catastrophe market and invests in various insurance-linked securities. The Company conducts its operations through its subsidiaries, including Blue Capital Re Ltd. (Blue Capital Re), which provides collateralized reinsurance, and Blue Capital Re ILS Ltd. (Blue Capital Re ILS), which conducts hedging and other investment activities. Blue Capital Re provides reinsurance to third-party insurance and reinsurance companies through reinsurance contracts, either directly with the cedant or on a fronted basis. Blue Capital Re ILS may purchase catastrophe bonds to access certain risks. Blue Capital Re or Blue Capital Re ILS may buy and sell industry loss warranties as a way to access certain risks. Blue Capital Re ILS’ portfolio may include over-the-counter or exchange-traded futures or options listed on catastrophe indexes, such as catastrophe or weather derivatives.

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