Critical Analysis: American National Insurance (ANAT) and Fortegra Financial (FRF)

American National Insurance (NASDAQ: ANAT) and Fortegra Financial (NYSE:FRF) are both finance companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and price targets for American National Insurance and Fortegra Financial, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American National Insurance 0 0 0 0 N/A
Fortegra Financial 0 0 0 0 N/A

Profitability

This table compares American National Insurance and Fortegra Financial’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American National Insurance 6.28% 2.89% 0.55%
Fortegra Financial N/A N/A N/A

Institutional and Insider Ownership

65.2% of American National Insurance shares are held by institutional investors. 23.5% of American National Insurance shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares American National Insurance and Fortegra Financial’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American National Insurance $3.23 billion 1.07 $181.00 million $7.75 16.54
Fortegra Financial N/A N/A N/A $0.64 15.58

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

Volatility and Risk

American National Insurance has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, Fortegra Financial has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Dividends

American National Insurance pays an annual dividend of $3.28 per share and has a dividend yield of 2.6%. Fortegra Financial does not pay a dividend. American National Insurance pays out 42.3% of its earnings in the form of a dividend.

Summary

American National Insurance beats Fortegra Financial on 10 of the 11 factors compared between the two stocks.

About American National Insurance

American National Insurance Company is engaged in life insurance, annuities, and property and casualty insurance. The Company also offers limited health insurance. Its family of companies includes six life insurance companies, eight property and casualty insurance companies, and various non-insurance subsidiaries. Its business segments include Life, which offers products, such as Whole Life, Term Life, Universal Life, Variable Universal Life and Credit Life Insurance; Annuity, including products, such as Deferred Annuity, Single Premium Immediate Annuity and Variable Annuity; Health, including, such as Medicare Supplement, Supplemental Insurance, Stop-Loss, Credit Disability and Medical Expense; Property and Casualty, which offers products, such as Personal Lines, Commercial Lines and Credit-Related Property Insurance products, and Corporate and Other, which consists of its invested assets that are not used to support insurance activities, and non-insurance subsidiaries.

About Fortegra Financial

Fortegra Financial Corporation is specializing in insurance products and services. The Company’s business process outsourcing segment offers various administrative services under the Consecta and Pacific Benefits Group Northwest, LLC brand names to insurance and other financial services companies. The Company’s Payment Protection segment delivers credit insurance, debt protection, warranty and service contracts, and motor club solutions under the Life of the South, Continental Car Club, United Motor Club, and Auto Knight Motor Club brand names to consumer finance companies, regional banks, community banks, retailers, small loan companies, warranty administrators, automobile dealers, vacation ownership developers, and credit unions.

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