EMC Insurance Group (EMCI) versus UNIVERSAL INSURANCE HOLDINGS INC (UVE) Critical Contrast
EMC Insurance Group (NASDAQ: EMCI) and UNIVERSAL INSURANCE HOLDINGS INC (NYSE:UVE) are both small-cap finance companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, institutional ownership, profitability, analyst recommendations and dividends.
Earnings and Valuation
This table compares EMC Insurance Group and UNIVERSAL INSURANCE HOLDINGS INC’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|EMC Insurance Group||$649.90 million||0.90||$38.22 million||$1.79||15.34|
|UNIVERSAL INSURANCE HOLDINGS INC||$711.40 million||1.04||$166.43 million||$2.81||7.56|
UNIVERSAL INSURANCE HOLDINGS INC has higher revenue and earnings than EMC Insurance Group. UNIVERSAL INSURANCE HOLDINGS INC is trading at a lower price-to-earnings ratio than EMC Insurance Group, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
28.2% of EMC Insurance Group shares are owned by institutional investors. Comparatively, 73.4% of UNIVERSAL INSURANCE HOLDINGS INC shares are owned by institutional investors. 4.5% of EMC Insurance Group shares are owned by insiders. Comparatively, 10.5% of UNIVERSAL INSURANCE HOLDINGS INC shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares EMC Insurance Group and UNIVERSAL INSURANCE HOLDINGS INC’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|EMC Insurance Group||5.87%||5.66%||1.98%|
|UNIVERSAL INSURANCE HOLDINGS INC||14.21%||25.85%||8.56%|
This is a summary of current ratings for EMC Insurance Group and UNIVERSAL INSURANCE HOLDINGS INC, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|EMC Insurance Group||0||0||0||0||N/A|
|UNIVERSAL INSURANCE HOLDINGS INC||0||0||1||0||3.00|
UNIVERSAL INSURANCE HOLDINGS INC has a consensus target price of $29.00, indicating a potential upside of 36.47%. Given UNIVERSAL INSURANCE HOLDINGS INC’s higher possible upside, analysts clearly believe UNIVERSAL INSURANCE HOLDINGS INC is more favorable than EMC Insurance Group.
EMC Insurance Group pays an annual dividend of $0.84 per share and has a dividend yield of 3.1%. UNIVERSAL INSURANCE HOLDINGS INC pays an annual dividend of $0.56 per share and has a dividend yield of 2.6%. EMC Insurance Group pays out 46.9% of its earnings in the form of a dividend. UNIVERSAL INSURANCE HOLDINGS INC pays out 19.9% 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. EMC Insurance Group has increased its dividend for 3 consecutive years. EMC Insurance Group is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Risk and Volatility
EMC Insurance Group has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500. Comparatively, UNIVERSAL INSURANCE HOLDINGS INC has a beta of 1.84, suggesting that its stock price is 84% more volatile than the S&P 500.
UNIVERSAL INSURANCE HOLDINGS INC beats EMC Insurance Group on 13 of the 16 factors compared between the two stocks.
About EMC Insurance Group
EMC Insurance Group Inc. is an insurance holding company. The Company operates through two segments: Property and Casualty Insurance and Reinsurance segment. It conducts its property and casualty insurance operations through its subsidiaries, including EMCASCO Insurance Company, Illinois EMCASCO Insurance Company and Dakota Fire Insurance Company, and its reinsurance operations through its subsidiary, EMC Reinsurance Company. The Company focuses on the sale of commercial lines of property and casualty insurance to small and medium-sized businesses. The Company offered its insurance products in 41 states, as of December 31, 2016. The Company is owned by Employers Mutual Casualty Company (Employers Mutual), a multiple-line property and casualty insurance company. The Company’s insurance agency, EMC Underwriters, LLC (EMC Underwriters), specializes in marketing excess and surplus lines of insurance.
About UNIVERSAL INSURANCE HOLDINGS INC
Universal Insurance Holdings, Inc. (UVE) is a private personal residential homeowners insurance company in Florida. The Company performs substantially all aspects of insurance underwriting, policy issuance, general administration, and claims processing and settlement internally. The Company’s subsidiaries include Universal Property & Casualty Insurance Company (UPCIC) and American Platinum Property and Casualty Insurance Company (APPCIC). UPCIC writes homeowners insurance policies in states, including Alabama, Delaware, Florida, Georgia, Hawaii, Indiana, Maryland, Massachusetts, Michigan, Minnesota, North Carolina, Pennsylvania, South Carolina and Virginia. APPCIC writes homeowners and commercial residential insurance policies in Florida. The Company has developed a suite of applications that provide underwriting, policy and claim administration services, including billing, policy maintenance, inspections, refunds, commissions and data analysis.
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