Emergent Capital (NYSE: IFT) and AMERISAFE (NASDAQ:AMSF) are both small-cap finance companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Earnings and Valuation

This table compares Emergent Capital and AMERISAFE’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Emergent Capital N/A N/A N/A N/A N/A
AMERISAFE $384.23 million 2.70 $95.81 million $3.43 15.76

AMERISAFE has higher revenue and earnings than Emergent Capital.

Dividends

AMERISAFE pays an annual dividend of $0.80 per share and has a dividend yield of 1.5%. Emergent Capital does not pay a dividend. AMERISAFE pays out 23.3% of its earnings in the form of a dividend.

Profitability

This table compares Emergent Capital and AMERISAFE’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Emergent Capital -187.06% -15.14% -4.53%
AMERISAFE 17.17% 14.04% 4.32%

Analyst Recommendations

This is a breakdown of current recommendations for Emergent Capital and AMERISAFE, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Emergent Capital 0 0 0 0 N/A
AMERISAFE 0 0 1 0 3.00

AMERISAFE has a consensus price target of $64.00, suggesting a potential upside of 18.41%. Given AMERISAFE’s higher possible upside, analysts clearly believe AMERISAFE is more favorable than Emergent Capital.

Insider & Institutional Ownership

99.5% of AMERISAFE shares are held by institutional investors. 2.2% of AMERISAFE shares are held by 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.

Summary

AMERISAFE beats Emergent Capital on 9 of the 11 factors compared between the two stocks.

About Emergent Capital

Emergent Capital, Inc., formerly Imperial Holdings, Inc., is a specialty finance company that invests in asset classes, primarily life settlements. The Company, through its subsidiary companies, owns a portfolio of approximately 630 life insurance policies (life settlements). The Company purchases individual policies and portfolios of life insurance policies and manages those assets based on actuarial and market data. The Company provides customized liquidity solutions to owners of illiquid financial assets in two markets, which include life finance and structured settlements. The Company focuses on lending to outright purchases of portfolios, to tertiary trades, as well as individual secondary market purchases. The Company invests in short and long-term life settlement investments.

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.

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