EMC Insurance Group (NASDAQ: EMCI) and Allstate Corporation (The) (NYSE:ALL) are both finance companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, earnings, valuation, risk and dividends.

Dividends

EMC Insurance Group pays an annual dividend of $0.84 per share and has a dividend yield of 3.0%. Allstate Corporation (The) pays an annual dividend of $1.48 per share and has a dividend yield of 1.6%. EMC Insurance Group pays out 46.9% of its earnings in the form of a dividend. Allstate Corporation (The) pays out 21.9% 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. Allstate Corporation (The) has increased its dividend for 6 consecutive years.

Profitability

This table compares EMC Insurance Group and Allstate Corporation (The)’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%
Allstate Corporation (The) 7.02% 12.73% 2.24%

Earnings and Valuation

This table compares EMC Insurance Group and Allstate Corporation (The)’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
EMC Insurance Group $649.90 million 0.93 $38.22 million $1.79 15.84
Allstate Corporation (The) $37.52 billion 0.89 $4.70 billion $6.77 13.60

Allstate Corporation (The) has higher revenue and earnings than EMC Insurance Group. Allstate Corporation (The) 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.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for EMC Insurance Group and Allstate Corporation (The), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EMC Insurance Group 0 0 0 0 N/A
Allstate Corporation (The) 1 5 6 0 2.42

Allstate Corporation (The) has a consensus target price of $90.27, indicating a potential downside of 1.98%. Given Allstate Corporation (The)’s higher probable upside, analysts plainly believe Allstate Corporation (The) is more favorable than EMC Insurance Group.

Institutional and Insider Ownership

28.2% of EMC Insurance Group shares are held by institutional investors. Comparatively, 76.1% of Allstate Corporation (The) shares are held by institutional investors. 4.5% of EMC Insurance Group shares are held by insiders. Comparatively, 1.6% of Allstate Corporation (The) shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility and Risk

EMC Insurance Group has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, Allstate Corporation (The) has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500.

Summary

Allstate Corporation (The) beats EMC Insurance Group on 12 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 Allstate Corporation (The)

The Allstate Corporation (Allstate) is a holding company for Allstate Insurance Company. The Company’s business is conducted principally through Allstate Insurance Company, Allstate Life Insurance Company and other subsidiaries. It is engaged in the property-liability insurance business and the life insurance, retirement and investment products business. Its segments include Allstate Protection, Allstate Financial, Discontinued Lines and Coverages, and Corporate and Other. The Allstate Protection segment sells private passenger auto, homeowners, and other property-liability insurance products through agencies and directly through contact centers and the Internet. The Allstate Financial segment sells life insurance and voluntary accident and health insurance products. The Corporate and Other segment consists of holding company activities and certain non-insurance operations. Its Discontinued Lines and Coverages segment includes results from property-liability insurance coverage.

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