W.R. Berkley Corporation (NYSE: WRB) and CNA Financial Corporation (NYSE:CNA) are both mid-cap finance companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, risk, profitability and valuation.

Dividends

W.R. Berkley Corporation pays an annual dividend of $0.56 per share and has a dividend yield of 0.8%. CNA Financial Corporation pays an annual dividend of $1.20 per share and has a dividend yield of 2.2%. W.R. Berkley Corporation pays out 13.1% of its earnings in the form of a dividend. CNA Financial Corporation pays out 35.5% 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. CNA Financial Corporation has increased its dividend for 7 consecutive years. CNA Financial Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

71.0% of W.R. Berkley Corporation shares are held by institutional investors. Comparatively, 99.9% of CNA Financial Corporation shares are held by institutional investors. 22.1% of W.R. Berkley Corporation shares are held by insiders. Comparatively, 0.5% of CNA Financial Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares W.R. Berkley Corporation and CNA Financial Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
W.R. Berkley Corporation 7.09% 6.22% 1.37%
CNA Financial Corporation 9.67% 7.14% 1.53%

Volatility and Risk

W.R. Berkley Corporation has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, CNA Financial Corporation has a beta of 1.34, indicating that its share price is 34% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for W.R. Berkley Corporation and CNA Financial Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
W.R. Berkley Corporation 0 9 1 0 2.10
CNA Financial Corporation 0 3 0 0 2.00

W.R. Berkley Corporation presently has a consensus price target of $68.00, indicating a potential downside of 0.85%. CNA Financial Corporation has a consensus price target of $46.67, indicating a potential downside of 13.79%. Given W.R. Berkley Corporation’s stronger consensus rating and higher possible upside, equities analysts plainly believe W.R. Berkley Corporation is more favorable than CNA Financial Corporation.

Earnings and Valuation

This table compares W.R. Berkley Corporation and CNA Financial Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
W.R. Berkley Corporation $7.71 billion 1.08 $1.15 billion $4.27 16.06
CNA Financial Corporation $9.52 billion 1.54 $1.75 billion $3.38 16.01

CNA Financial Corporation has higher revenue and earnings than W.R. Berkley Corporation. CNA Financial Corporation is trading at a lower price-to-earnings ratio than W.R. Berkley Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

CNA Financial Corporation beats W.R. Berkley Corporation on 10 of the 17 factors compared between the two stocks.

About W.R. Berkley Corporation

W. R. Berkley Corporation is an insurance holding company. It operates through two segments: Insurance and Reinsurance-Global. The Insurance segment consists of its commercial insurance business operations, comprising excess and surplus lines, and admitted lines, throughout the United States, as well as its insurance business operations in the United Kingdom, Continental Europe, South America, Canada, Mexico, Scandinavia, Asia and Australia. Its Insurance segment comprises business units, such as Acadia Insurance, American Mining Insurance Group, Berkley Accident and Health, Berkley Agribusiness Risk Specialists, Berkley Aviation and Berkley Canada. Reinsurance consists of its reinsurance business on a facultative and treaty basis, in the United States, the United Kingdom, Continental Europe, Australia, the Asia-Pacific region and South Africa. Its Reinsurance segment comprises business units, such as Berkley Re America, Berkley Re Asia Pacific, Berkley Re Direct and Berkley Re UK.

About CNA Financial Corporation

CNA Financial Corporation is an insurance holding company. The Company’s segments include Specialty, Commercial, International, Life & Group Non-Core, and Corporate & Other Non-Core. Its Specialty segment provides a range of professional, financial, and specialty property, and casualty products and services. The Commercial segment includes property and casualty insurance products and services to small, middle-market and large businesses. Its International segment provides management and professional liability coverages, as well as a range of other property and casualty insurance products and services. The Life & Group Non-Core segment primarily includes the results of its individual and group long term care businesses that are in run-off. Its Corporate & Other Non-Core segment primarily includes certain corporate expenses, including interest on corporate debt, and the results of certain property and casualty business in run-off.

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