AMERISAFE (NASDAQ: AMSF) and FBL Financial Group (NYSE:FFG) are both small-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Profitability

This table compares AMERISAFE and FBL Financial Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMERISAFE 17.17% 14.04% 4.32%
FBL Financial Group 15.70% 9.12% 1.16%

Insider & Institutional Ownership

99.7% of AMERISAFE shares are owned by institutional investors. Comparatively, 29.4% of FBL Financial Group shares are owned by institutional investors. 2.2% of AMERISAFE shares are owned by insiders. Comparatively, 0.6% of FBL Financial Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

AMERISAFE pays an annual dividend of $0.80 per share and has a dividend yield of 1.4%. FBL Financial Group pays an annual dividend of $1.76 per share and has a dividend yield of 2.6%. AMERISAFE pays out 23.3% of its earnings in the form of a dividend. FBL Financial Group pays out 38.2% 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. FBL Financial Group has increased its dividend for 4 consecutive years. FBL Financial Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

AMERISAFE has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, FBL Financial Group has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for AMERISAFE and FBL Financial Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMERISAFE 0 0 1 0 3.00
FBL Financial Group 0 1 0 0 2.00

AMERISAFE presently has a consensus target price of $64.00, suggesting a potential upside of 15.52%. Given AMERISAFE’s stronger consensus rating and higher possible upside, equities research analysts clearly believe AMERISAFE is more favorable than FBL Financial Group.

Earnings and Valuation

This table compares AMERISAFE and FBL Financial Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AMERISAFE $384.23 million 2.76 $95.81 million $3.43 16.15
FBL Financial Group $736.38 million 2.33 $184.11 million $4.61 14.92

FBL Financial Group has higher revenue and earnings than AMERISAFE. FBL Financial Group is trading at a lower price-to-earnings ratio than AMERISAFE, indicating that it is currently the more affordable of the two stocks.

Summary

AMERISAFE beats FBL Financial Group on 11 of the 17 factors compared between the two stocks.

About AMERISAFE

Amerisafe, Inc. is an insurance holding company. The Company is engaged in providing workers’ compensation insurance focused on small to mid-sized employers engaged in hazardous industries, principally construction, trucking, logging and lumber, manufacturing, and agriculture. It is engaged in underwriting the workers’ compensation exposures inherent in these industries. It provides coverage to employers under state and federal workers’ compensation laws. The Company’s workers’ compensation insurance policies provide benefits to injured employees for, temporary or permanent disability, death and medical and hospital expenses. The Company provides safety services at employers’ workplaces as a component of its underwriting process. It utilizes claims management practices. In addition to its voluntary workers’ compensation business, it underwrites workers’ compensation policies for employers assigned to the Company and assumes reinsurance premiums from mandatory pooling arrangements.

About FBL Financial Group

FBL Financial Group, Inc. sells individual life insurance and annuity products under the brand name of Farm Bureau Financial Services. The Company’s segments are Annuity Segment, which sells a variety of traditional annuity products; Life Insurance Segment, which sells a range of traditional and universal life insurance products, and Corporate and Other segment, which provides various support operations, corporate capital and other product lines. It also offers life and annuity products through its subsidiary, Greenfields Life Insurance Company. Its other subsidiaries support various functional areas and affiliates by providing investment advisory and marketing and distribution services. It manages all aspects of two Farm Bureau affiliated property-casualty insurance companies, Farm Bureau Property & Casualty Insurance Company and Western Agricultural Insurance Company.

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