OneBeacon Insurance Group (NYSE: OB) and HCI Group (NYSE:HCI) are both small-cap financials companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.

Valuation & Earnings

This table compares OneBeacon Insurance Group and HCI Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
OneBeacon Insurance Group $1.17 billion 0.36 $16.78 million $0.73 24.78
HCI Group $275.40 million 1.38 $79.13 million $3.65 10.42

HCI Group has higher revenue, but lower earnings than OneBeacon Insurance Group. HCI Group is trading at a lower price-to-earnings ratio than OneBeacon Insurance Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares OneBeacon Insurance Group and HCI Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
OneBeacon Insurance Group 0.10% -0.12% 0.03%
HCI Group 13.52% 15.65% 5.11%

Insider and Institutional Ownership

17.3% of OneBeacon Insurance Group shares are held by institutional investors. Comparatively, 71.5% of HCI Group shares are held by institutional investors. 76.6% of OneBeacon Insurance Group shares are held by company insiders. Comparatively, 20.4% of HCI Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

OneBeacon Insurance Group has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, HCI Group has a beta of 2.31, suggesting that its share price is 131% more volatile than the S&P 500.

Dividends

OneBeacon Insurance Group pays an annual dividend of $0.84 per share and has a dividend yield of 4.6%. HCI Group pays an annual dividend of $1.40 per share and has a dividend yield of 3.7%. OneBeacon Insurance Group pays out 115.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. HCI Group pays out 38.4% of its earnings in the form of a dividend. HCI Group has increased its dividend for 3 consecutive years.

Analyst Ratings

This is a summary of current ratings for OneBeacon Insurance Group and HCI Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
OneBeacon Insurance Group 0 0 0 0 N/A
HCI Group 0 1 2 0 2.67

HCI Group has a consensus price target of $43.33, indicating a potential upside of 13.95%. Given HCI Group’s higher possible upside, analysts clearly believe HCI Group is more favorable than OneBeacon Insurance Group.

Summary

HCI Group beats OneBeacon Insurance Group on 12 of the 16 factors compared between the two stocks.

OneBeacon Insurance Group Company Profile

OneBeacon Insurance Group, Ltd. (OneBeacon) is a specialty property and casualty insurance writer that offers a range of insurance products in the United States. The Company’s segments include Specialty Products, Specialty Industries, and Investing, Financing and Corporate. As of December 31, 2016, the Specialty Products segment consisted of 10 underwriting operating segments representing an aggregation based on those that offer products, coverages and services to customers across the United States. As of December 31, 2016, the Specialty Industries segment consisted of six underwriting operating segments representing an aggregation based on those that focus on solving the needs of a particular customer or industry group. The Investing, Financing and Corporate segment includes the investing and financing activities for OneBeacon on a consolidated basis, and certain other activities conducted through the Company and its intermediate subsidiaries.

HCI Group Company Profile

HCI Group, Inc. (HCI) is an insurance holding company. The Company operates through four operating divisions: property and casualty insurance, reinsurance, investment real estate and information technology. Its operations include Insurance Operations and Other Operations. Its Insurance Operations include property and casualty insurance, and reinsurance. The Company, through its subsidiary, Homeowners Choice Property & Casualty Insurance Company, Inc. (HCPCI), provides property and casualty insurance to homeowners, condominium owners and tenants on properties located in Florida. HCPCI also offers flood-endorsed and wind-only policies to new and pre-existing Florida customers. Its Other Operations include information technology (IT) and real estate. The Company’s real estate operations consist of multiple properties it owns and operates.

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