State National Companies (NASDAQ: SNC) and State Auto Financial (NASDAQ:STFC) are both small-cap financials companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, institutional ownership, analyst recommendations, profitability, risk and earnings.
Valuation and Earnings
This table compares State National Companies and State Auto Financial’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|State National Companies||$217.07 million||4.08||$49.07 million||$1.25||16.82|
|State Auto Financial||$1.41 billion||0.84||$21.00 million||$0.65||43.08|
State National Companies pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. State Auto Financial pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. State National Companies pays out 19.2% of its earnings in the form of a dividend. State Auto Financial pays out 61.5% 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.
Insider & Institutional Ownership
58.6% of State National Companies shares are held by institutional investors. Comparatively, 33.1% of State Auto Financial shares are held by institutional investors. 34.8% of State National Companies shares are held by insiders. Comparatively, 1.5% of State Auto Financial shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares State National Companies and State Auto Financial’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|State National Companies||23.91%||18.02%||1.72%|
|State Auto Financial||1.94%||-1.53%||-0.46%|
This is a breakdown of current recommendations and price targets for State National Companies and State Auto Financial, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|State National Companies||1||2||4||0||2.43|
|State Auto Financial||0||1||0||0||2.00|
State National Companies currently has a consensus price target of $50.80, suggesting a potential upside of 141.67%. State Auto Financial has a consensus price target of $26.00, suggesting a potential downside of 7.14%. Given State National Companies’ stronger consensus rating and higher possible upside, analysts plainly believe State National Companies is more favorable than State Auto Financial.
State National Companies beats State Auto Financial on 12 of the 15 factors compared between the two stocks.
State National Companies Company Profile
State National Companies, Inc. is a specialty provider of property and casualty insurance. The Company’s segments include Program Services, Lender Services and Corporate. In the Program Services segment, the Company operates an issuing carrier (fronting) business to provide insurance capacity access to the United States property and casualty insurance markets. In the Lender Services segment, the Company specializes in providing collateral protection insurance, which insures automobiles held as collateral for loans made by financial institutions. The Company writes its insurance business through its insurance company subsidiaries, which include State National Insurance Company, Inc. (SNIC), National Specialty Insurance Company (NSIC) and United Specialty Insurance Company (USIC). As of December 31, 2016, SNIC and NSIC were admitted carriers licensed to write property and casualty business in all 50 states and the District of Columbia. USIC is an admitted carrier in Delaware.
State Auto Financial Company Profile
State Auto Financial Corporation is a property and casualty insurance holding company. The Company is engaged in writing personal, business and specialty insurance. Its segments include Personal Insurance Segment, Commercial Insurance Segment and Specialty Insurance Segment. Its Personal Insurance Segment include personal auto, homeowners and other personal; Commercial Insurance Segment include commercial auto, small commercial package, middle market commercial, workers’ compensation and other commercial, and Specialty Insurance Segment include Excess & Surplus (E&S) property, E&S casualty and programs. State Auto Financial’s subsidiaries include State Auto Property & Casualty Insurance Company (State Auto P&C), Milbank Insurance Company (Milbank) and State Auto Insurance Company of Ohio (SA Ohio), each of which is a property and casualty insurance company, and Stateco Financial Services, Inc., (Stateco), which provides investment management services to affiliated insurance companies.
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