Contrasting Alleghany (Y) & First Financial (THFF)

First Financial (NASDAQ: THFF) and Alleghany (NYSE:Y) are both finance companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.

Volatility and Risk

First Financial has a beta of 0.85, suggesting that its stock price is 15% less volatile than the S&P 500. Comparatively, Alleghany has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Valuation and Earnings

This table compares First Financial and Alleghany’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
First Financial $156.31 million 3.72 $38.41 million $2.85 16.70
Alleghany $6.13 billion 1.47 $456.92 million ($0.13) -4,499.38

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

Profitability

This table compares First Financial and Alleghany’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
First Financial 23.48% 8.11% 1.17%
Alleghany 0.10% -0.14% -0.05%

Insider & Institutional Ownership

53.7% of First Financial shares are held by institutional investors. Comparatively, 82.2% of Alleghany shares are held by institutional investors. 3.6% of First Financial shares are held by insiders. Comparatively, 4.0% of Alleghany shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Dividends

First Financial pays an annual dividend of $1.02 per share and has a dividend yield of 2.1%. Alleghany does not pay a dividend. First Financial pays out 35.8% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent recommendations and price targets for First Financial and Alleghany, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
First Financial 0 1 0 0 2.00
Alleghany 0 1 1 0 2.50

First Financial currently has a consensus price target of $50.00, indicating a potential upside of 5.04%. Alleghany has a consensus price target of $625.00, indicating a potential upside of 6.85%. Given Alleghany’s stronger consensus rating and higher probable upside, analysts clearly believe Alleghany is more favorable than First Financial.

Summary

Alleghany beats First Financial on 9 of the 16 factors compared between the two stocks.

First Financial Company Profile

First Financial Corporation is a financial holding company. The Company, through its subsidiaries, offers financial services, including commercial, mortgage and consumer lending, lease financing, trust account services, depositor services and insurance services. The Company’s subsidiaries include First Financial Bank, N.A. (the Bank), The Morris Plan Company of Terre Haute (Morris Plan), First Chanticleer Corporation and FFB Risk Management Co., Inc. The Bank has two investment subsidiaries, Portfolio Management Specialists A (Specialists A) and Portfolio Management Specialists B (Specialists B), which holds and manages certain assets to manage various income streams and provides opportunities for capital creation as needed. The Bank’s loan portfolio includes commercial loans, residential loans and consumer loans. Its deposits include non-interest-bearing demand deposits, interest-bearing demand deposits, savings deposits, time deposits: $100,000 or more, and other time deposits.

Alleghany Company Profile

Alleghany Corporation is an insurance holding company. The Company, through its subsidiary Alleghany Insurance Holdings LLC (AIHL) and its subsidiaries, is engaged in the property and casualty insurance business. AIHL’s insurance operations are conducted by its subsidiaries RSUI Group, Inc. (RSUI), CapSpecialty, Inc. (CapSpecialty) and Pacific Compensation Corporation (PacificComp). Its segments include reinsurance and insurance. Its reinsurance segment consists of property and casualty reinsurance operations conducted by Transatlantic Holdings, Inc. reinsurance operating subsidiaries. Its insurance segment consists of property and casualty insurance operations conducted by AIHL through its insurance operating subsidiaries RSUI, CapSpecialty and PacificComp. AIHL Re LLC, which is a captive reinsurance company, provides reinsurance to its insurance operating subsidiaries and affiliates.

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