EMC Insurance Group (NASDAQ: EMCI) and United Insurance Holdings Corp. (NASDAQ:UIHC) are both small-cap finance companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, risk, profitability, dividends and earnings.

Dividends

EMC Insurance Group pays an annual dividend of $0.84 per share and has a dividend yield of 2.9%. United Insurance Holdings Corp. pays an annual dividend of $0.24 per share and has a dividend yield of 1.5%. EMC Insurance Group pays out 46.9% of its earnings in the form of a dividend. United Insurance Holdings Corp. pays out 1,200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. EMC Insurance Group is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

EMC Insurance Group has a beta of 0.92, indicating that its stock price is 8% less volatile than the S&P 500. Comparatively, United Insurance Holdings Corp. has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for EMC Insurance Group and United Insurance Holdings Corp., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
EMC Insurance Group 0 1 0 0 2.00
United Insurance Holdings Corp. 0 1 2 1 3.00

EMC Insurance Group presently has a consensus price target of $30.00, indicating a potential upside of 1.83%. United Insurance Holdings Corp. has a consensus price target of $15.25, indicating a potential downside of 3.11%. Given EMC Insurance Group’s higher probable upside, research analysts plainly believe EMC Insurance Group is more favorable than United Insurance Holdings Corp..

Earnings & Valuation

This table compares EMC Insurance Group and United Insurance Holdings Corp.’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 0.97 $38.22 million $1.79 16.46
United Insurance Holdings Corp. $559.34 million 1.20 $28.75 million $0.02 787.00

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

Profitability

This table compares EMC Insurance Group and United Insurance Holdings Corp.’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%
United Insurance Holdings Corp. 0.73% 4.99% 1.34%

Institutional & Insider Ownership

28.2% of EMC Insurance Group shares are owned by institutional investors. Comparatively, 29.1% of United Insurance Holdings Corp. shares are owned by institutional investors. 4.5% of EMC Insurance Group shares are owned by company insiders. Comparatively, 22.6% of United Insurance Holdings Corp. shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

EMC Insurance Group beats United Insurance Holdings Corp. on 9 of the 17 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 United Insurance Holdings Corp.

United Insurance Holdings Corp. is a property and casualty insurance holding company that sources, writes and services residential property and casualty insurance policies using a network of agents and a group of insurance subsidiaries. The Company’s insurance subsidiary is United Property & Casualty Insurance Company. Its other subsidiaries include United Insurance Management, L.C., the managing general agent that manages substantially all aspects of United Property & Casualty Insurance Company’s business; Skyway Claims Services, LLC, which provides services to its insurance affiliate; UPC Re, which provides a portion of the reinsurance protection purchased by its insurance affiliate. The Company’s principal product is homeowners’ insurance, which it offers in Connecticut, Florida, Georgia, Hawaii, Louisiana, Massachusetts, New Jersey, North Carolina, Rhode Island, South Carolina and Texas.

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