Navigators Group (NAVG) and State National Companies (SNC) Financial Contrast

Navigators Group (NASDAQ: NAVG) and State National Companies (NASDAQ:SNC) are both small-cap finance companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Analyst Ratings

This is a summary of current recommendations and price targets for Navigators Group and State National Companies, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Navigators Group 1 2 1 0 2.00
State National Companies 1 2 4 0 2.43

Navigators Group currently has a consensus target price of $51.50, suggesting a potential upside of 3.73%. State National Companies has a consensus target price of $50.80, suggesting a potential upside of 141.67%. Given State National Companies’ stronger consensus rating and higher possible upside, analysts clearly believe State National Companies is more favorable than Navigators Group.

Earnings & Valuation

This table compares Navigators Group and State National Companies’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Navigators Group $1.20 billion 1.22 $82.72 million $1.15 43.17
State National Companies $217.07 million 4.08 $49.07 million $1.25 16.82

Navigators Group has higher revenue and earnings than State National Companies. State National Companies is trading at a lower price-to-earnings ratio than Navigators Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Navigators Group and State National Companies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Navigators Group 2.79% 2.32% 0.56%
State National Companies 23.91% 18.02% 1.72%

Insider and Institutional Ownership

74.0% of Navigators Group shares are owned by institutional investors. Comparatively, 58.6% of State National Companies shares are owned by institutional investors. 24.1% of Navigators Group shares are owned by company insiders. Comparatively, 34.8% of State National Companies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Navigators Group pays an annual dividend of $0.24 per share and has a dividend yield of 0.5%. State National Companies pays an annual dividend of $0.24 per share and has a dividend yield of 1.1%. Navigators Group pays out 20.9% of its earnings in the form of a dividend. State National Companies pays out 19.2% 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. State National Companies is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

State National Companies beats Navigators Group on 11 of the 15 factors compared between the two stocks.

About Navigators Group

The Navigators Group, Inc. is an insurance holding company. The Company is an international insurance company focused on marine insurance. The Company’s segments include U.S. Insurance, International Insurance (Int’l Insurance), Global Reinsurance (GlobalRe) and Corporate. The Company’s Property and Casualty (P&C) insurance business primarily offers general liability coverage, and umbrella and excess liability coverage to commercial enterprises through its U.S. Insurance and Int’l Insurance segments. It also offers reinsurance products through its GlobalRe segment. It distributes its products through international, national and regional, retail and wholesale insurance brokers. The Company’s U.S. Insurance and Int’l Insurance segments consists of three segments, such as Marine, Property and Casualty (P&C) and Professional Liability. Its GlobalRe products include accident & health (A&H), marine, P&C and professional liability.

About State National Companies

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.

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