Travelers Companies (NYSE: TRV) and Markel (NYSE:MKL) are both large-cap finance companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, profitability and institutional ownership.

Dividends

Travelers Companies pays an annual dividend of $2.88 per share and has a dividend yield of 2.1%. Markel does not pay a dividend. Travelers Companies pays out 33.4% of its earnings in the form of a dividend. Markel has raised its dividend for 8 consecutive years.

Profitability

This table compares Travelers Companies and Markel’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Travelers Companies 8.56% 9.87% 2.28%
Markel 1.60% 0.83% 0.27%

Risk & Volatility

Travelers Companies has a beta of 1.25, meaning that its share price is 25% more volatile than the S&P 500. Comparatively, Markel has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Travelers Companies and Markel, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Travelers Companies 3 7 7 0 2.24
Markel 0 2 1 0 2.33

Travelers Companies currently has a consensus price target of $131.16, indicating a potential downside of 3.10%. Markel has a consensus price target of $1,066.67, indicating a potential downside of 3.33%. Given Travelers Companies’ higher possible upside, research analysts clearly believe Travelers Companies is more favorable than Markel.

Institutional & Insider Ownership

78.5% of Travelers Companies shares are owned by institutional investors. Comparatively, 76.9% of Markel shares are owned by institutional investors. 0.8% of Travelers Companies shares are owned by insiders. Comparatively, 2.5% of Markel shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Travelers Companies and Markel’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Travelers Companies $27.63 billion 1.34 $3.01 billion $8.61 15.72
Markel $5.61 billion 2.73 $455.68 million $4.50 245.21

Travelers Companies has higher revenue and earnings than Markel. Travelers Companies is trading at a lower price-to-earnings ratio than Markel, indicating that it is currently the more affordable of the two stocks.

Summary

Travelers Companies beats Markel on 11 of the 17 factors compared between the two stocks.

About Travelers Companies

The Travelers Companies, Inc. is a holding company. The Company’s segments include Business and International Insurance; Bond & Specialty Insurance, and Personal Insurance. Through its subsidiaries, it provides commercial and personal property and casualty insurance products and services. The Business and International Insurance segment offers property and casualty insurance and insurance related services to its clients, in the United States and in Canada, as well as in the United Kingdom, the Republic of Ireland, Brazil and throughout other parts of the world. The Bond & Specialty Insurance segment provides surety, fidelity, management liability, professional liability, and other property and casualty coverages and related risk management services to a range of primarily domestic customers, utilizing various degrees of financially-based underwriting approaches. The Personal Insurance segment writes a range of property and casualty insurance covering individuals’ personal risks.

About Markel

Markel Corporation is a financial holding company serving a range of markets. The Company’s principal business markets and underwrites specialty insurance products. It monitors and reports its ongoing underwriting operations in three segments: U.S. Insurance, International Insurance and Reinsurance. The Company, through its subsidiary Markel Ventures, Inc. (Markel Ventures), owns interests in various industrial and service businesses that operate outside of the specialty insurance marketplace. The U.S. Insurance segment includes all direct business and facultative placements written by its insurance subsidiaries domiciled in the United States. The International Insurance segment includes all direct business and facultative placements written by its insurance subsidiaries domiciled outside of the United States, including its syndicate at Lloyd’s of London (Lloyd’s). The Reinsurance segment includes all treaty reinsurance written across the Company.

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