RLI Corp. (NYSE: RLI) and Atlas Financial Holdings (NASDAQ:AFH) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.

Volatility & Risk

RLI Corp. has a beta of 1.24, suggesting that its share price is 24% more volatile than the S&P 500. Comparatively, Atlas Financial Holdings has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.

Valuation and Earnings

This table compares RLI Corp. and Atlas Financial Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
RLI Corp. $811.78 million 3.13 $129.75 million $2.26 25.51
Atlas Financial Holdings $197.16 million 1.21 -$1.70 million $0.23 86.52

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

Profitability

This table compares RLI Corp. and Atlas Financial Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
RLI Corp. 12.38% 10.10% 3.09%
Atlas Financial Holdings 1.67% -3.32% -1.03%

Analyst Ratings

This is a breakdown of recent ratings and price targets for RLI Corp. and Atlas Financial Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RLI Corp. 1 3 0 0 1.75
Atlas Financial Holdings 0 0 3 0 3.00

RLI Corp. presently has a consensus target price of $41.33, indicating a potential downside of 28.30%. Atlas Financial Holdings has a consensus target price of $18.50, indicating a potential downside of 7.04%. Given Atlas Financial Holdings’ stronger consensus rating and higher possible upside, analysts clearly believe Atlas Financial Holdings is more favorable than RLI Corp..

Dividends

RLI Corp. pays an annual dividend of $0.84 per share and has a dividend yield of 1.5%. Atlas Financial Holdings does not pay a dividend. RLI Corp. pays out 37.2% of its earnings in the form of a dividend. RLI Corp. has increased its dividend for 40 consecutive years.

Institutional and Insider Ownership

82.9% of RLI Corp. shares are held by institutional investors. Comparatively, 79.1% of Atlas Financial Holdings shares are held by institutional investors. 6.1% of RLI Corp. shares are held by company insiders. Comparatively, 12.7% of Atlas Financial Holdings shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

RLI Corp. beats Atlas Financial Holdings on 11 of the 17 factors compared between the two stocks.

RLI Corp. Company Profile

RLI Corp. is a specialty insurance company. The Company underwrites selected property and casualty insurance through subsidiaries, as well as offers insurance coverages in both the specialty admitted, and excess and surplus markets. It operates through Casualty, Property and Surety segments. Its Casualty segment consists of commercial and personal umbrella, general liability, commercial transportation, professional services, small commercial, executive products, medical professional liability and other casualty businesses. Its property segment consists of commercial property, marine, specialty personal, property reinsurance and crop reinsurance businesses. Its surety segment consists of miscellaneous, commercial, contract and energy businesses. The Company conducts its operations principally through three insurance companies: RLI Insurance Company (RLI Ins.), Mt. Hawley Insurance Company (Mt. Hawley) and Contractors Bonding and Insurance Company (CBIC).

Atlas Financial Holdings Company Profile

Atlas Financial Holdings Inc formerly JJR VI Acquisition Corp is a Canada-based company. It is engaged in the business of providing commercial automobile insurance in the United States with a niche market orientation. The Company’s automobile insurance products provide coverage in three areas: liability, accident benefits and physical damage. Liability insurance provides coverage where the insured is responsible for an automobile accident, for the payment for injuries and property damage to third parties. Accident benefit policies or personal injury protection policies provide coverage for loss of income, medical and rehabilitation expenses for insured persons who are injured in an automobile accident, Physical damage coverages provide for the payment of damages to an insured automobile arising from a collision with another object or from other risks. In January 2013, the Company acquired Camelot Services Inc. and its insurance subsidiary, Gateway Insurance Company.

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