Allied World Assurance Company Holdings (NYSE: AWH) and Loews Corporation (NYSE:L) are both financials companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, dividends, valuation, profitability, institutional ownership, earnings and analyst recommendations.

Institutional and Insider Ownership

86.5% of Allied World Assurance Company Holdings shares are owned by institutional investors. Comparatively, 58.6% of Loews Corporation shares are owned by institutional investors. 3.2% of Allied World Assurance Company Holdings shares are owned by company insiders. Comparatively, 11.8% of Loews Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Allied World Assurance Company Holdings pays an annual dividend of $0.52 per share and has a dividend yield of 1.1%. Loews Corporation pays an annual dividend of $0.25 per share and has a dividend yield of 0.5%. Allied World Assurance Company Holdings pays out 17.9% of its earnings in the form of a dividend. Loews Corporation pays out 7.5% 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. Allied World Assurance Company Holdings has raised its dividend for 3 consecutive years. Allied World Assurance Company Holdings is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Allied World Assurance Company Holdings and Loews Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Allied World Assurance Company Holdings 12.56% 8.96% 2.42%
Loews Corporation 8.44% 4.84% 1.47%

Valuation and Earnings

This table compares Allied World Assurance Company Holdings and Loews Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Allied World Assurance Company Holdings N/A N/A N/A $2.90 16.98
Loews Corporation $13.28 billion 1.24 $3.33 billion $3.32 14.71

Loews Corporation has higher revenue and earnings than Allied World Assurance Company Holdings. Loews Corporation is trading at a lower price-to-earnings ratio than Allied World Assurance Company Holdings, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Allied World Assurance Company Holdings has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500. Comparatively, Loews Corporation has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Allied World Assurance Company Holdings and Loews Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Allied World Assurance Company Holdings 0 6 0 0 2.00
Loews Corporation 1 1 0 0 1.50

Allied World Assurance Company Holdings currently has a consensus price target of $39.25, suggesting a potential downside of 20.29%. Loews Corporation has a consensus price target of $39.00, suggesting a potential downside of 20.16%. Given Loews Corporation’s higher possible upside, analysts clearly believe Loews Corporation is more favorable than Allied World Assurance Company Holdings.

Summary

Allied World Assurance Company Holdings beats Loews Corporation on 7 of the 13 factors compared between the two stocks.

Allied World Assurance Company Holdings Company Profile

Allied World Assurance Company Holdings Ltd is a Germany-based holding company. It provides property, casualty and specialty insurance and reinsurance solutions to clients around the world. The Company operates in three segments: North American Insurance, Global Markets Insurance and Reinsurance. The North American Insurance segment consists of the Company’s direct insurance operations in the United States, Bermuda and Canada. The Global Markets Insurance segment includes all of the Company’s direct insurance operations outside of North America. The Company’s reinsurance segment includes the reinsurance of property, general casualty, professional liability, specialty lines and property catastrophe coverage’s written by other reinsurance companies. The Company leases space in Australia, Bermuda, Canada, Hong Kong, Ireland, Labuan, Singapore, the United Kingdom and the United States for the operation of its North American Insurance, Global Markets Insurance and Reinsurance segments.

Loews Corporation Company Profile

Loews Corporation is a holding company. The Company, through its subsidiaries, is engaged in commercial property and casualty insurance; operation of offshore oil and gas drilling rigs; transportation and storage of natural gas and natural gas liquids, and operation of a chain of hotels. The Company has five segments consisted of its four individual operating subsidiaries, CNA Financial Corporation (CNA), Diamond Offshore Drilling, Inc. (Diamond Offshore), Boardwalk Pipeline Partners, LP (Boardwalk Pipeline) and Loews Hotels Holding Corporation (Loews Hotels), and the Corporate segment. CNA’s insurance products include commercial property and casualty coverages, including surety. CNA’s services include risk management, information services, warranty and claims administration. CNA’s core business, commercial property and casualty insurance operations include Specialty, Commercial and International lines of business.

Receive News & Ratings for Allied World Assurance Company Holdings Ltd Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Allied World Assurance Company Holdings Ltd and related companies with MarketBeat.com's FREE daily email newsletter.