James River Group (JRVR) versus Alterra Capital (ALTE) Financial Review

James River Group (NASDAQ: JRVR) and Alterra Capital (NASDAQ:ALTE) are both financials companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, valuation, earnings and risk.

Earnings & Valuation

This table compares James River Group and Alterra Capital’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
James River Group $586.23 million 2.01 $74.47 million $2.28 17.50
Alterra Capital N/A N/A N/A $1.65 19.73

James River Group has higher revenue and earnings than Alterra Capital. James River Group is trading at a lower price-to-earnings ratio than Alterra Capital, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and target prices for James River Group and Alterra Capital, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
James River Group 0 2 2 0 2.50
Alterra Capital 0 0 0 0 N/A

James River Group currently has a consensus target price of $45.00, suggesting a potential upside of 12.81%. Given James River Group’s higher probable upside, analysts clearly believe James River Group is more favorable than Alterra Capital.

Profitability

This table compares James River Group and Alterra Capital’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
James River Group 8.98% 9.36% 2.66%
Alterra Capital N/A N/A N/A

Institutional & Insider Ownership

96.2% of James River Group shares are owned by institutional investors. 41.0% of James River Group shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

James River Group pays an annual dividend of $3.20 per share and has a dividend yield of 8.0%. Alterra Capital does not pay a dividend. James River Group pays out 140.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

James River Group beats Alterra Capital on 10 of the 12 factors compared between the two stocks.

About James River Group

James River Group Holdings, Ltd. (JRG Holdings) is an insurance and reinsurance holding company. The Company operates through four segments: Excess and Surplus Lines, Specialty Admitted Insurance, Casualty Reinsurance, and Corporate and Other. The Excess and Surplus Lines segment offers commercial excess and surplus lines liability and excess property insurance products. The Specialty Admitted Insurance segment offers workers’ compensation insurance coverage, as well as specialty admitted fronting and program business. The Casualty Reinsurance segment offers commercial liability and non-catastrophe property reinsurance to the United States insurance companies and to its the United States-based insurance subsidiaries. The Corporate and Other segment consists of certain management and treasury activities of James River Group, Inc., James River Group Holdings UK Limited and JRG Holdings. It owns six insurance companies focused on specialty insurance niches and a reinsurance company.

About Alterra Capital

Alterra Capital Holdings Limited (Alterra) is engaged in providing diversified specialty insurance and reinsurance products to corporations, public entities and property and casualty insurers. In Bermuda, the Company conducts its insurance and reinsurance operations through Alterra Bermuda. In Europe, the Company conducts its non-Lloyd’s operations primarily from Dublin, Ireland through Alterra Europe. In the United States, the Company’s U.S. reinsurance operations are conducted through Alterra Re USA, a Connecticut-domiciled reinsurance company. The Company’s U.S. insurance operations are conducted through Alterra E&S. In Latin America, the Company provides reinsurance to clients through Alterra at Lloyd’s in Rio de Janeiro, Brazil, using Lloyd’s admitted status, through Alterra Europe. In June 2012, the Company formed New Point V Limited. On May 1, 2013, Alterra Capital was acquired by Markel Corporation.

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