RLI Corp. (NYSE: RLI) and Montpelier Re Holdings (NYSE:MRH) are both finance companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Earnings & Valuation

This table compares RLI Corp. and Montpelier Re Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
RLI Corp. $816.33 million 3.22 $114.92 million $1.80 33.12
Montpelier Re Holdings N/A N/A N/A $3.84 11.09

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

Profitability

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

Net Margins Return on Equity Return on Assets
RLI Corp. 9.97% 8.53% 2.57%
Montpelier Re Holdings 35.71% 13.24% 6.70%

Analyst Ratings

This is a breakdown of recent recommendations for RLI Corp. and Montpelier Re Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
RLI Corp. 1 4 0 0 1.80
Montpelier Re Holdings 0 0 0 0 N/A

RLI Corp. currently has a consensus price target of $41.67, indicating a potential downside of 30.11%. Given RLI Corp.’s higher possible upside, equities research analysts clearly believe RLI Corp. is more favorable than Montpelier Re Holdings.

Insider & Institutional Ownership

84.6% of RLI Corp. shares are held by institutional investors. 6.1% of RLI Corp. shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

RLI Corp. pays an annual dividend of $0.84 per share and has a dividend yield of 1.4%. Montpelier Re Holdings does not pay a dividend. RLI Corp. pays out 46.7% of its earnings in the form of a dividend. RLI Corp. has raised its dividend for 7 consecutive years and Montpelier Re Holdings has raised its dividend for 40 consecutive years.

Summary

Montpelier Re Holdings beats RLI Corp. on 6 of the 11 factors compared between the two stocks.

About RLI Corp.

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).

About Montpelier Re Holdings

Montpelier RE Holdings Ltd. is a holding company. The Company provides customized insurance and reinsurance solutions to the global market. Through its affiliates in Bermuda, it provides institutional and retail investors with direct access to the global property reinsurance market. It operates in three segments: Montpelier Bermuda, which consists of the assets and operations of Montpelier Reinsurance Ltd., which is its wholly owned operating subsidiary based in Pembroke, Bermuda and is registered as a Bermuda Class four insurer; Montpelier at Lloyd’s, which consists of the assets and operations of Montpelier Syndicate 5151, Montpelier Capital Limited, Montpelier at Lloyd’s Limited, Montpelier Underwriting Services Limited and Montpelier Underwriting Inc., and Collateralized Reinsurance, which is marketed under the name Blue Capital. Blue Capital is an asset management platform offering property catastrophe reinsurance-linked investment products to institutional and retail investors.

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