Erie Indemnity (NASDAQ: ERIE) and White Mountains Insurance Group (NYSE:WTM) are both mid-cap finance companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.

Profitability

This table compares Erie Indemnity and White Mountains Insurance Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Erie Indemnity 12.62% 24.98% 13.51%
White Mountains Insurance Group 69.96% 1.32% 0.82%

Dividends

Erie Indemnity pays an annual dividend of $3.13 per share and has a dividend yield of 2.6%. White Mountains Insurance Group pays an annual dividend of $1.00 per share and has a dividend yield of 0.1%. Erie Indemnity pays out 77.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. White Mountains Insurance Group pays out 0.7% of its earnings in the form of a dividend. White Mountains Insurance Group has raised its dividend for 21 consecutive years.

Valuation and Earnings

This table compares Erie Indemnity and White Mountains Insurance Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Erie Indemnity $1.60 billion 3.47 $210.36 million $4.02 29.84
White Mountains Insurance Group $1.36 billion 2.41 $412.50 million $134.40 6.49

White Mountains Insurance Group has lower revenue, but higher earnings than Erie Indemnity. White Mountains Insurance Group is trading at a lower price-to-earnings ratio than Erie Indemnity, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

30.9% of Erie Indemnity shares are owned by institutional investors. Comparatively, 81.9% of White Mountains Insurance Group shares are owned by institutional investors. 46.8% of Erie Indemnity shares are owned by insiders. Comparatively, 5.1% of White Mountains Insurance Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Erie Indemnity and White Mountains Insurance Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Erie Indemnity 0 0 0 0 N/A
White Mountains Insurance Group 0 0 0 0 N/A

Volatility & Risk

Erie Indemnity has a beta of 0.47, meaning that its stock price is 53% less volatile than the S&P 500. Comparatively, White Mountains Insurance Group has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500.

Summary

White Mountains Insurance Group beats Erie Indemnity on 8 of the 14 factors compared between the two stocks.

Erie Indemnity Company Profile

Erie Indemnity Company is a management company. The Company serves as the attorney-in-fact for the subscribers (policyholders) at the Erie Insurance Exchange (Exchange). The Exchange is a reciprocal insurer that writes property and casualty insurance. The Company’s function is to perform certain services for the Exchange relating to the sales, underwriting and issuance of policies on behalf of the Exchange. The sales related services the Company provides include agent compensation, and certain sales and advertising support services. Agent compensation includes scheduled commissions to agents based upon premiums written, as well as additional commissions and bonuses to agents. The underwriting services the Company provides include underwriting and policy processing expenses. It provides information technology services that supports various functions. The remaining services the Company provides include customer service and administrative costs.

White Mountains Insurance Group Company Profile

White Mountains Insurance Group, Ltd. is a holding company. The Company’s principal businesses are conducted through its insurance subsidiaries and other affiliates. Its segments include HG Global/BAM and Other Operations. The HG Global/BAM segment consists of the operations of HG Global Ltd. (HG Global) and Build America Mutual Assurance Company (BAM). The Other Operations segment consists of the Company and its intermediate holding companies, its investment management subsidiary, White Mountains Advisors LLC, and certain consolidated and unconsolidated private capital investments.

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